Correlation Between Kuke Music and Endeavor Group

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

By analyzing existing cross correlation between Kuke Music Holding and Endeavor Group Holdings, you can compare the effects of market volatilities on Kuke Music and Endeavor Group 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 Kuke Music with a short position of Endeavor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Endeavor Group.

Diversification Opportunities for Kuke Music and Endeavor Group

-0.7

Correlation Coefficient

Kuke Music  Endeavor Group

Excellent diversification

The 3 months correlation between Kuke and Endeavor is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Endeavor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavor Group Holdings and Kuke Music 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 Kuke Music Holding are associated (or correlated) with Endeavor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavor Group Holdings has no effect on the direction of Kuke Music i.e., Kuke Music and Endeavor Group go up and down completely randomly.

Pair Corralation between Kuke Music and Endeavor Group

Given the investment horizon of 90 days Kuke Music Holding is expected to under-perform the Endeavor Group. In addition to that, Kuke Music is 23.57 times more volatile than Endeavor Group Holdings. It trades about -0.08 of its total potential returns per unit of risk. Endeavor Group Holdings is currently generating about 0.28 per unit of volatility. If you would invest  2,742  in Endeavor Group Holdings on August 31, 2024 and sell it today you would earn a total of  292.00  from holding Endeavor Group Holdings or generate 10.65% return on investment over 90 days.

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

Kuke Music Holding  vs.  Endeavor Group Holdings

Kuke Music Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuke Music Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Endeavor Group Holdings

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavor Group Holdings are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Endeavor Group may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Kuke Music and Endeavor Group

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

The idea behind Kuke Music Holding and Endeavor Group Holdings 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 CEOs Directory module to screen CEOs from public companies around the world.