Correlation Between KHVATEC CoLtd and Cube Entertainment

Can any of the company-specific risk be diversified away by investing in both KHVATEC CoLtd and Cube 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 KHVATEC CoLtd and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KHVATEC CoLtd and Cube Entertainment, you can compare the effects of market volatilities on KHVATEC CoLtd and Cube 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 KHVATEC CoLtd with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KHVATEC CoLtd and Cube Entertainment.

Diversification Opportunities for KHVATEC CoLtd and Cube Entertainment

-0.13

Correlation Coefficient

KHVATEC CoLtd  Cube Entertainment

Good diversification

The 3 months correlation between KHVATEC and Cube is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KHVATEC CoLtd and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and KHVATEC 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 KHVATEC CoLtd are associated (or correlated) with Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of KHVATEC CoLtd i.e., KHVATEC CoLtd and Cube Entertainment go up and down completely randomly.

Pair Corralation between KHVATEC CoLtd and Cube Entertainment

Assuming the 90 days trading horizon KHVATEC CoLtd is expected to under-perform the Cube Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, KHVATEC CoLtd is 1.44 times less risky than Cube Entertainment. The stock trades about -0.02 of its potential returns per unit of risk. The Cube Entertainment is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  1,373,000  in Cube Entertainment on December 4, 2024 and sell it today you would earn a total of  276,000  from holding Cube Entertainment or generate 20.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KHVATEC CoLtd  vs.  Cube Entertainment

KHVATEC CoLtd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KHVATEC CoLtd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KHVATEC CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

Cube Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cube Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cube Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KHVATEC CoLtd and Cube Entertainment

The main advantage of trading using opposite KHVATEC CoLtd and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KHVATEC CoLtd position performs unexpectedly, Cube 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 Cube Entertainment will offset losses from the drop in Cube Entertainment's long position.

The idea behind KHVATEC CoLtd and Cube Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.