Correlation Between WEBTOON Entertainment and Zane Interactive

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

Diversification Opportunities for WEBTOON Entertainment and Zane Interactive

0.0

Correlation Coefficient

WEBTOON Entertainment  Zane Interactive

Pay attention - limited upside

The 3 months correlation between WEBTOON and Zane is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Zane Interactive Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zane Interactive Pub 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 Zane Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zane Interactive Pub has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Zane Interactive go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Zane Interactive

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Zane Interactive. In addition to that, WEBTOON Entertainment is 1.18 times more volatile than Zane Interactive Publishing. It trades about -0.05 of its total potential returns per unit of risk. Zane Interactive Publishing is currently generating about -0.04 per unit of volatility. If you would invest  2.27  in Zane Interactive Publishing on October 13, 2024 and sell it today you would lose (2.26) from holding Zane Interactive Publishing or give up 99.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	27.51%
Values	Daily Returns

WEBTOON Entertainment Common  vs.  Zane Interactive Publishing

WEBTOON Entertainment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WEBTOON Entertainment Common are ranked lower than 7 (%) 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.

Zane Interactive Pub

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zane Interactive Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Zane Interactive is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with WEBTOON Entertainment and Zane Interactive

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

The idea behind WEBTOON Entertainment Common and Zane Interactive Publishing 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.