Correlation Between AfreecaTV and Com2uS

Can any of the company-specific risk be diversified away by investing in both AfreecaTV and Com2uS 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 AfreecaTV and Com2uS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AfreecaTV Co and Com2uS, you can compare the effects of market volatilities on AfreecaTV and Com2uS 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 AfreecaTV with a short position of Com2uS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfreecaTV and Com2uS.

Diversification Opportunities for AfreecaTV and Com2uS

0.52

Correlation Coefficient

AfreecaTV  Com2uS

Very weak diversification

The 3 months correlation between AfreecaTV and Com2uS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AfreecaTV Co and Com2uS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com2uS and AfreecaTV 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 AfreecaTV Co are associated (or correlated) with Com2uS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com2uS has no effect on the direction of AfreecaTV i.e., AfreecaTV and Com2uS go up and down completely randomly.

Pair Corralation between AfreecaTV and Com2uS

Assuming the 90 days trading horizon AfreecaTV Co is expected to under-perform the Com2uS. But the stock apears to be less risky and, when comparing its historical volatility, AfreecaTV Co is 1.2 times less risky than Com2uS. The stock trades about -0.01 of its potential returns per unit of risk. The Com2uS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,860,000  in Com2uS on September 20, 2024 and sell it today you would earn a total of  1,100,000  from holding Com2uS or generate 28.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

AfreecaTV Co  vs.  Com2uS

AfreecaTV

Risk-Adjusted Performance

0 of 100

Very Weak

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

Com2uS

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Com2uS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Com2uS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AfreecaTV and Com2uS

The main advantage of trading using opposite AfreecaTV and Com2uS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfreecaTV position performs unexpectedly, Com2uS 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 Com2uS will offset losses from the drop in Com2uS's long position.

The idea behind AfreecaTV Co and Com2uS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.