Correlation Between Cube Entertainment and Actoz Soft

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

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

Diversification Opportunities for Cube Entertainment and Actoz Soft

0.44

Correlation Coefficient

Cube Entertainment  Actoz Soft

Very weak diversification

The 3 months correlation between Cube and Actoz is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Actoz Soft CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actoz Soft CoLtd 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 Actoz Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actoz Soft CoLtd has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Actoz Soft go up and down completely randomly.

Pair Corralation between Cube Entertainment and Actoz Soft

Assuming the 90 days trading horizon Cube Entertainment is expected to generate 2.41 times less return on investment than Actoz Soft. In addition to that, Cube Entertainment is 1.01 times more volatile than Actoz Soft CoLtd. It trades about 0.04 of its total potential returns per unit of risk. Actoz Soft CoLtd is currently generating about 0.09 per unit of volatility. If you would invest  622,000  in Actoz Soft CoLtd on October 22, 2024 and sell it today you would earn a total of  98,000  from holding Actoz Soft CoLtd or generate 15.76% return on investment over 90 days.

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

Cube Entertainment  vs.  Actoz Soft CoLtd

Cube Entertainment

Risk-Adjusted Performance

2 of 100

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 weak basic indicators, Cube Entertainment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Actoz Soft CoLtd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Actoz Soft CoLtd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Actoz Soft sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cube Entertainment and Actoz Soft

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

The idea behind Cube Entertainment and Actoz Soft CoLtd 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.