Correlation Between WEBTOON Entertainment and Alger Small

Can any of the company-specific risk be diversified away by investing in both WEBTOON Entertainment and Alger Small 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 Alger Small 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 Alger Small Cap, you can compare the effects of market volatilities on WEBTOON Entertainment and Alger Small 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 Alger Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEBTOON Entertainment and Alger Small.

Diversification Opportunities for WEBTOON Entertainment and Alger Small

0.9

Correlation Coefficient

WEBTOON Entertainment  Alger Small

Almost no diversification

The 3 months correlation between WEBTOON and Alger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Alger Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Small Cap 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 Alger Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Small Cap has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Alger Small go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Alger Small

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Alger Small. In addition to that, WEBTOON Entertainment is 1.99 times more volatile than Alger Small Cap. It trades about -0.2 of its total potential returns per unit of risk. Alger Small Cap is currently generating about -0.12 per unit of volatility. If you would invest  2,090  in Alger Small Cap on December 29, 2024 and sell it today you would lose (288.00) from holding Alger Small Cap or give up 13.78% of portfolio value over 90 days.

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

WEBTOON Entertainment Common  vs.  Alger Small Cap

WEBTOON Entertainment

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Alger Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alger Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with WEBTOON Entertainment and Alger Small

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

The idea behind WEBTOON Entertainment Common and Alger Small Cap 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 Global Correlations module to find global opportunities by holding instruments from different markets.