Correlation Between Bookook Steel and Cube Entertainment

Can any of the company-specific risk be diversified away by investing in both Bookook Steel and Cube Entertainment 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 Bookook Steel and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bookook Steel and Cube Entertainment, you can compare the effects of market volatilities on Bookook Steel and Cube Entertainment 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 Bookook Steel with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and Cube Entertainment.

Diversification Opportunities for Bookook Steel and Cube Entertainment

-0.48

Correlation Coefficient

Bookook Steel  Cube Entertainment

Very good diversification

The 3 months correlation between Bookook and Cube is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Bookook Steel 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 Bookook Steel are associated (or correlated) with Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of Bookook Steel i.e., Bookook Steel and Cube Entertainment go up and down completely randomly.

Pair Corralation between Bookook Steel and Cube Entertainment

Assuming the 90 days trading horizon Bookook Steel is expected to generate 1.24 times less return on investment than Cube Entertainment. But when comparing it to its historical volatility, Bookook Steel is 1.61 times less risky than Cube Entertainment. It trades about 0.12 of its potential returns per unit of risk. Cube Entertainment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,509,000  in Cube Entertainment on September 25, 2024 and sell it today you would earn a total of  100,000  from holding Cube Entertainment or generate 6.63% return on investment over 90 days.

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

Bookook Steel  vs.  Cube Entertainment

Bookook Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bookook Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bookook Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cube Entertainment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cube Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cube Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bookook Steel and Cube Entertainment

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

The idea behind Bookook Steel and Cube Entertainment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..