Correlation Between Gannett and WEBTOON Entertainment

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

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

Diversification Opportunities for Gannett and WEBTOON Entertainment

-0.19

Correlation Coefficient

Gannett  WEBTOON Entertainment

Good diversification

The 3 months correlation between Gannett and WEBTOON is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gannett Co and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment and Gannett 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 Gannett Co 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 Gannett i.e., Gannett and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Gannett and WEBTOON Entertainment

Considering the 90-day investment horizon Gannett Co is expected to generate 0.84 times more return on investment than WEBTOON Entertainment. However, Gannett Co is 1.18 times less risky than WEBTOON Entertainment. It trades about 0.11 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.05 per unit of risk. If you would invest  238.00  in Gannett Co on October 9, 2024 and sell it today you would earn a total of  266.00  from holding Gannett Co or generate 111.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.04%
Values	Daily Returns

Gannett Co  vs.  WEBTOON Entertainment Common

Gannett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Gannett is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

WEBTOON Entertainment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WEBTOON Entertainment Common are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, WEBTOON Entertainment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gannett and WEBTOON Entertainment

The main advantage of trading using opposite Gannett and WEBTOON Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gannett 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 Gannett Co 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.