Correlation Between WEBTOON Entertainment and Scholastic

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

Diversification Opportunities for WEBTOON Entertainment and Scholastic

-0.02

Correlation Coefficient

WEBTOON Entertainment  Scholastic

Good diversification

The 3 months correlation between WEBTOON and Scholastic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Scholastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholastic 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 Scholastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholastic has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Scholastic go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Scholastic

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Scholastic. In addition to that, WEBTOON Entertainment is 1.07 times more volatile than Scholastic. It trades about -0.22 of its total potential returns per unit of risk. Scholastic is currently generating about -0.03 per unit of volatility. If you would invest  2,060  in Scholastic on December 30, 2024 and sell it today you would lose (193.00) from holding Scholastic or give up 9.37% of portfolio value over 90 days.

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

WEBTOON Entertainment Common  vs.  Scholastic

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.

Scholastic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scholastic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with WEBTOON Entertainment and Scholastic

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

The idea behind WEBTOON Entertainment Common and Scholastic 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 Stocks Directory module to find actively traded stocks across global markets.