Correlation Between Cube Entertainment and PJ Metal

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

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

Diversification Opportunities for Cube Entertainment and PJ Metal

-0.58

Correlation Coefficient

Cube Entertainment  PJ Metal

Excellent diversification

The 3 months correlation between Cube and 128660 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal 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 PJ Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Metal has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and PJ Metal go up and down completely randomly.

Pair Corralation between Cube Entertainment and PJ Metal

Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.57 times more return on investment than PJ Metal. However, Cube Entertainment is 1.57 times more volatile than PJ Metal Co. It trades about 0.09 of its potential returns per unit of risk. PJ Metal Co is currently generating about -0.07 per unit of risk. If you would invest  1,386,000  in Cube Entertainment on September 22, 2024 and sell it today you would earn a total of  181,000  from holding Cube Entertainment or generate 13.06% return on investment over 90 days.

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

Cube Entertainment  vs.  PJ Metal Co

Cube Entertainment

Risk-Adjusted Performance

3 of 100

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 January 2025.

PJ Metal

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PJ Metal Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PJ Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cube Entertainment and PJ Metal

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

The idea behind Cube Entertainment and PJ Metal 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.