Correlation Between ASTORY CoLtd and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both ASTORY CoLtd and Next Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ASTORY CoLtd and Next Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTORY CoLtd and Next Entertainment World, you can compare the effects of market volatilities on ASTORY CoLtd and Next Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ASTORY CoLtd with a short position of Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTORY CoLtd and Next Entertainment.
Diversification Opportunities for ASTORY CoLtd and Next Entertainment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASTORY and Next is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ASTORY CoLtd and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World and ASTORY CoLtd is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ASTORY CoLtd are associated (or correlated) with Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of ASTORY CoLtd i.e., ASTORY CoLtd and Next Entertainment go up and down completely randomly.
Pair Corralation between ASTORY CoLtd and Next Entertainment
Assuming the 90 days trading horizon ASTORY CoLtd is expected to generate 0.79 times more return on investment than Next Entertainment. However, ASTORY CoLtd is 1.26 times less risky than Next Entertainment. It trades about -0.09 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.08 per unit of risk. If you would invest 2,030,000 in ASTORY CoLtd on September 1, 2024 and sell it today you would lose (1,234,000) from holding ASTORY CoLtd or give up 60.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASTORY CoLtd vs. Next Entertainment World
Performance |
| Timeline |
| ASTORY CoLtd |
| Next Entertainment World |
ASTORY CoLtd and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTORY CoLtd and Next Entertainment
The main advantage of trading using opposite ASTORY CoLtd and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTORY CoLtd position performs unexpectedly, Next Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Next Entertainment will offset losses from the drop in Next Entertainment's long position.| ASTORY CoLtd vs. BGF Retail Co | ASTORY CoLtd vs. Lindeman Asia Investment | ASTORY CoLtd vs. Daewoo Engineering Construction | ASTORY CoLtd vs. GS Engineering Construction |
| Next Entertainment vs. AfreecaTV Co | Next Entertainment vs. Seegene | Next Entertainment vs. SS TECH | Next Entertainment vs. Busan Industrial Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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