Correlation Between WEBTOON Entertainment and Mazda

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

Diversification Opportunities for WEBTOON Entertainment and Mazda

-0.58

Correlation Coefficient

WEBTOON Entertainment  Mazda

Excellent diversification

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

Pair Corralation between WEBTOON Entertainment and Mazda

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Mazda. In addition to that, WEBTOON Entertainment is 1.32 times more volatile than Mazda Motor. It trades about -0.2 of its total potential returns per unit of risk. Mazda Motor is currently generating about 0.01 per unit of volatility. If you would invest  685.00  in Mazda Motor on December 28, 2024 and sell it today you would lose (3.00) from holding Mazda Motor or give up 0.44% of portfolio value over 90 days.

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

WEBTOON Entertainment Common  vs.  Mazda Motor

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 weak 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.

Mazda Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mazda Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mazda is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WEBTOON Entertainment and Mazda

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

The idea behind WEBTOON Entertainment Common and Mazda Motor 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.