Correlation Between Kenon Holdings and WEBTOON Entertainment

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

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

Diversification Opportunities for Kenon Holdings and WEBTOON Entertainment

0.69

Correlation Coefficient

Kenon Holdings  WEBTOON Entertainment

Poor diversification

The 3 months correlation between Kenon and WEBTOON is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment and Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings i.e., Kenon Holdings and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Kenon Holdings and WEBTOON Entertainment

Considering the 90-day investment horizon Kenon Holdings is expected to generate 0.39 times more return on investment than WEBTOON Entertainment. However, Kenon Holdings is 2.54 times less risky than WEBTOON Entertainment. It trades about 0.03 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  2,433  in Kenon Holdings on September 26, 2024 and sell it today you would earn a total of  542.00  from holding Kenon Holdings or generate 22.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	25.4%
Values	Daily Returns

Kenon Holdings  vs.  WEBTOON Entertainment Common

Kenon Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Kenon Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

WEBTOON Entertainment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WEBTOON Entertainment Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, WEBTOON Entertainment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kenon Holdings and WEBTOON Entertainment

The main advantage of trading using opposite Kenon Holdings and WEBTOON Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings 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 Kenon Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..