Correlation Between Cube Entertainment and Solution Advanced

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

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

Diversification Opportunities for Cube Entertainment and Solution Advanced

0.3

Correlation Coefficient

Cube Entertainment  Solution Advanced

Weak diversification

The 3 months correlation between Cube and Solution is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced and Cube Entertainment 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 Cube Entertainment are associated (or correlated) with Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Solution Advanced go up and down completely randomly.

Pair Corralation between Cube Entertainment and Solution Advanced

Assuming the 90 days trading horizon Cube Entertainment is expected to generate 9.57 times less return on investment than Solution Advanced. But when comparing it to its historical volatility, Cube Entertainment is 3.01 times less risky than Solution Advanced. It trades about 0.05 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  137,500  in Solution Advanced Technology on December 25, 2024 and sell it today you would earn a total of  93,000  from holding Solution Advanced Technology or generate 67.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cube Entertainment  vs.  Solution Advanced Technology

Cube Entertainment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cube Entertainment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cube Entertainment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Solution Advanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solution Advanced Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Solution Advanced sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cube Entertainment and Solution Advanced

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

The idea behind Cube Entertainment and Solution Advanced Technology 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.