Correlation Between Clean Seas and WEBTOON Entertainment

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

By analyzing existing cross correlation between Clean Seas Seafood and WEBTOON Entertainment Common, you can compare the effects of market volatilities on Clean Seas and WEBTOON Entertainment 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 Clean Seas with a short position of WEBTOON Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and WEBTOON Entertainment.

Diversification Opportunities for Clean Seas and WEBTOON Entertainment

0.31

Correlation Coefficient

Clean Seas  WEBTOON Entertainment

Weak diversification

The 3 months correlation between Clean and WEBTOON is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of Clean Seas i.e., Clean Seas and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Clean Seas and WEBTOON Entertainment

Assuming the 90 days horizon Clean Seas Seafood is expected to generate 1.01 times more return on investment than WEBTOON Entertainment. However, Clean Seas is 1.01 times more volatile than WEBTOON Entertainment Common. It trades about -0.13 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.16 per unit of risk. If you would invest  7.00  in Clean Seas Seafood on December 20, 2024 and sell it today you would lose (2.00) from holding Clean Seas Seafood or give up 28.57% of portfolio value over 90 days.

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

Clean Seas Seafood  vs.  WEBTOON Entertainment Common

Clean Seas Seafood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Seas Seafood has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

WEBTOON Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEBTOON Entertainment Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Clean Seas and WEBTOON Entertainment

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

The idea behind Clean Seas Seafood and WEBTOON Entertainment Common 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.