Correlation Between Kuke Music and Pop Culture
Can any of the company-specific risk be diversified away by investing in both Kuke Music and Pop Culture 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 Kuke Music and Pop Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuke Music Holding and Pop Culture Group, you can compare the effects of market volatilities on Kuke Music and Pop Culture 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 Kuke Music with a short position of Pop Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Pop Culture.
Diversification Opportunities for Kuke Music and Pop Culture
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kuke and Pop is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Pop Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pop Culture Group and Kuke Music 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 Kuke Music Holding are associated (or correlated) with Pop Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pop Culture Group has no effect on the direction of Kuke Music i.e., Kuke Music and Pop Culture go up and down completely randomly.
Pair Corralation between Kuke Music and Pop Culture
Given the investment horizon of 90 days Kuke Music Holding is expected to generate 1.73 times more return on investment than Pop Culture. However, Kuke Music is 1.73 times more volatile than Pop Culture Group. It trades about 0.04 of its potential returns per unit of risk. Pop Culture Group is currently generating about -0.14 per unit of risk. If you would invest 44.00 in Kuke Music Holding on November 2, 2024 and sell it today you would lose (2.51) from holding Kuke Music Holding or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Kuke Music Holding vs. Pop Culture Group
Performance |
| Timeline |
| Kuke Music Holding |
| Pop Culture Group |
Kuke Music and Pop Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuke Music and Pop Culture
The main advantage of trading using opposite Kuke Music and Pop Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music position performs unexpectedly, Pop Culture 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 Pop Culture will offset losses from the drop in Pop Culture's long position.| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
| Pop Culture vs. Hollywall Entertainment | Pop Culture vs. Kuke Music Holding | Pop Culture vs. Reading International | Pop Culture vs. Reservoir Media |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |