Correlation Between WEBTOON Entertainment and Electrovaya Common

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

Diversification Opportunities for WEBTOON Entertainment and Electrovaya Common

0.58

Correlation Coefficient

WEBTOON Entertainment  Electrovaya Common

Very weak diversification

The 3 months correlation between WEBTOON and Electrovaya is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Electrovaya Common go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Electrovaya Common

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Electrovaya Common. In addition to that, WEBTOON Entertainment is 1.58 times more volatile than Electrovaya Common Shares. It trades about -0.04 of its total potential returns per unit of risk. Electrovaya Common Shares is currently generating about -0.05 per unit of volatility. If you would invest  430.00  in Electrovaya Common Shares on October 7, 2024 and sell it today you would lose (167.00) from holding Electrovaya Common Shares or give up 38.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	58.59%
Values	Daily Returns

WEBTOON Entertainment Common  vs.  Electrovaya Common Shares

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

Electrovaya Common Shares

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WEBTOON Entertainment and Electrovaya Common

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

The idea behind WEBTOON Entertainment Common and Electrovaya Common Shares 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.