Correlation Between WEBTOON Entertainment and Kenon Holdings

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

Diversification Opportunities for WEBTOON Entertainment and Kenon Holdings

0.69

Correlation Coefficient

WEBTOON Entertainment  Kenon Holdings

Poor diversification

The 3 months correlation between WEBTOON and Kenon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Kenon Holdings go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Kenon Holdings

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Kenon Holdings. In addition to that, WEBTOON Entertainment is 2.54 times more volatile than Kenon Holdings. It trades about -0.05 of its total potential returns per unit of risk. Kenon Holdings is currently generating about 0.03 per unit of volatility. 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

WEBTOON Entertainment Common  vs.  Kenon Holdings

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kenon Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 5 (%) 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.

Pair Trading with WEBTOON Entertainment and Kenon Holdings

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

The idea behind WEBTOON Entertainment Common and Kenon 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.