Correlation Between WEBTOON Entertainment and Acco Brands

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

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

Diversification Opportunities for WEBTOON Entertainment and Acco Brands

0.14

Correlation Coefficient

WEBTOON Entertainment  Acco Brands

Average diversification

The 3 months correlation between WEBTOON and Acco is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and WEBTOON Entertainment 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 WEBTOON Entertainment Common are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Acco Brands go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Acco Brands

Given the investment horizon of 90 days WEBTOON Entertainment is expected to generate 5.17 times less return on investment than Acco Brands. In addition to that, WEBTOON Entertainment is 1.91 times more volatile than Acco Brands. It trades about 0.01 of its total potential returns per unit of risk. Acco Brands is currently generating about 0.08 per unit of volatility. If you would invest  531.00  in Acco Brands on August 31, 2024 and sell it today you would earn a total of  50.00  from holding Acco Brands or generate 9.42% return on investment over 90 days.

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

WEBTOON Entertainment Common  vs.  Acco Brands

WEBTOON Entertainment

Risk-Adjusted Performance

0 of 100

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 very healthy basic indicators, WEBTOON Entertainment is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Acco Brands

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Acco Brands may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with WEBTOON Entertainment and Acco Brands

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

The idea behind WEBTOON Entertainment Common and Acco Brands 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.