Correlation Between Gushen and WEBTOON Entertainment

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

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

Diversification Opportunities for Gushen and WEBTOON Entertainment

0.05

Correlation Coefficient

Gushen  WEBTOON Entertainment

Significant diversification

The 3 months correlation between Gushen and WEBTOON is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gushen Inc and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment and Gushen 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 Gushen Inc 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 Gushen i.e., Gushen and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Gushen and WEBTOON Entertainment

If you would invest  1,060  in WEBTOON Entertainment Common on October 9, 2024 and sell it today you would earn a total of  323.00  from holding WEBTOON Entertainment Common or generate 30.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Gushen Inc  vs.  WEBTOON Entertainment Common

Gushen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gushen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Gushen is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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 unsteady basic indicators, WEBTOON Entertainment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gushen and WEBTOON Entertainment

The main advantage of trading using opposite Gushen and WEBTOON Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gushen 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 Gushen Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.