Correlation Between WEBTOON Entertainment and Phoenix New

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

Diversification Opportunities for WEBTOON Entertainment and Phoenix New

0.5

Correlation Coefficient

WEBTOON Entertainment  Phoenix New

Very weak diversification

The 3 months correlation between WEBTOON and Phoenix is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common and Phoenix New Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix New Media 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 Phoenix New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix New Media has no effect on the direction of WEBTOON Entertainment i.e., WEBTOON Entertainment and Phoenix New go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Phoenix New

Given the investment horizon of 90 days WEBTOON Entertainment is expected to generate 3.78 times less return on investment than Phoenix New. But when comparing it to its historical volatility, WEBTOON Entertainment Common is 1.05 times less risky than Phoenix New. It trades about 0.0 of its potential returns per unit of risk. Phoenix New Media is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  215.00  in Phoenix New Media on May 5, 2025 and sell it today you would lose (3.00) from holding Phoenix New Media or give up 1.4% of portfolio value over 90 days.

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

WEBTOON Entertainment Common  vs.  Phoenix New Media

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 very healthy basic indicators, WEBTOON Entertainment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Phoenix New Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phoenix New Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Phoenix New is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WEBTOON Entertainment and Phoenix New

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

The idea behind WEBTOON Entertainment Common and Phoenix New Media 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.