Correlation Between Cube Entertainment and KHVATEC CoLtd

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

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

Diversification Opportunities for Cube Entertainment and KHVATEC CoLtd

-0.32

Correlation Coefficient

Cube Entertainment  KHVATEC CoLtd

Very good diversification

The 3 months correlation between Cube and KHVATEC is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC 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 KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and KHVATEC CoLtd go up and down completely randomly.

Pair Corralation between Cube Entertainment and KHVATEC CoLtd

Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.65 times more return on investment than KHVATEC CoLtd. However, Cube Entertainment is 1.65 times more volatile than KHVATEC CoLtd. It trades about 0.07 of its potential returns per unit of risk. KHVATEC CoLtd is currently generating about -0.22 per unit of risk. If you would invest  1,485,000  in Cube Entertainment on September 13, 2024 and sell it today you would earn a total of  158,000  from holding Cube Entertainment or generate 10.64% return on investment over 90 days.

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

Cube Entertainment  vs.  KHVATEC CoLtd

Cube Entertainment

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cube Entertainment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cube Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

KHVATEC CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KHVATEC CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cube Entertainment and KHVATEC CoLtd

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

The idea behind Cube Entertainment and KHVATEC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.