Correlation Between Kumho Petro and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both Kumho Petro and Netmarble Games 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 Kumho Petro and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumho Petro Chemical and Netmarble Games Corp, you can compare the effects of market volatilities on Kumho Petro and Netmarble Games 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 Kumho Petro with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Petro and Netmarble Games.
Diversification Opportunities for Kumho Petro and Netmarble Games
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kumho and Netmarble is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Petro Chemical and Netmarble Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmarble Games Corp and Kumho Petro 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 Kumho Petro Chemical are associated (or correlated) with Netmarble Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmarble Games Corp has no effect on the direction of Kumho Petro i.e., Kumho Petro and Netmarble Games go up and down completely randomly.
Pair Corralation between Kumho Petro and Netmarble Games
Assuming the 90 days trading horizon Kumho Petro Chemical is expected to generate 1.07 times more return on investment than Netmarble Games. However, Kumho Petro is 1.07 times more volatile than Netmarble Games Corp. It trades about 0.15 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.44 per unit of risk. If you would invest 4,815,000 in Kumho Petro Chemical on October 31, 2024 and sell it today you would earn a total of 285,000 from holding Kumho Petro Chemical or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Petro Chemical vs. Netmarble Games Corp
Performance |
| Timeline |
| Kumho Petro Chemical |
| Netmarble Games Corp |
Kumho Petro and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Petro and Netmarble Games
The main advantage of trading using opposite Kumho Petro and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Petro position performs unexpectedly, Netmarble Games 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 Netmarble Games will offset losses from the drop in Netmarble Games' long position.| Kumho Petro vs. Vissem Electronics Co | Kumho Petro vs. ABCO Electronics Co | Kumho Petro vs. Daejoo Electronic Materials | Kumho Petro vs. Jeong Moon Information |
| Netmarble Games vs. Nable Communications | Netmarble Games vs. Digital Power Communications | Netmarble Games vs. LG Electronics | Netmarble Games vs. Infinitt Healthcare Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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