Correlation Between Cube Entertainment and EO Technics

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

By analyzing existing cross correlation between Cube Entertainment and EO Technics Co, you can compare the effects of market volatilities on Cube Entertainment and EO Technics 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 EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and EO Technics.

Diversification Opportunities for Cube Entertainment and EO Technics

-0.75

Correlation Coefficient

Cube Entertainment  EO Technics

Pay attention - limited upside

The 3 months correlation between Cube and 039030 is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics 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 EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and EO Technics go up and down completely randomly.

Pair Corralation between Cube Entertainment and EO Technics

Assuming the 90 days trading horizon Cube Entertainment is expected to generate 0.73 times more return on investment than EO Technics. However, Cube Entertainment is 1.37 times less risky than EO Technics. It trades about 0.01 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.03 per unit of risk. If you would invest  1,485,000  in Cube Entertainment on September 12, 2024 and sell it today you would lose (25,000) from holding Cube Entertainment or give up 1.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Cube Entertainment  vs.  EO Technics Co

Cube Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cube Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

EO Technics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EO Technics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Cube Entertainment and EO Technics

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

The idea behind Cube Entertainment and EO Technics Co 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.