Correlation Between Kbi Metal and NCsoft Corp
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and NCsoft Corp 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 Kbi Metal and NCsoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and NCsoft Corp, you can compare the effects of market volatilities on Kbi Metal and NCsoft Corp 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 Kbi Metal with a short position of NCsoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and NCsoft Corp.
Diversification Opportunities for Kbi Metal and NCsoft Corp
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kbi and NCsoft is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and NCsoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCsoft Corp and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with NCsoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCsoft Corp has no effect on the direction of Kbi Metal i.e., Kbi Metal and NCsoft Corp go up and down completely randomly.
Pair Corralation between Kbi Metal and NCsoft Corp
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the NCsoft Corp. In addition to that, Kbi Metal is 1.18 times more volatile than NCsoft Corp. It trades about -0.55 of its total potential returns per unit of risk. NCsoft Corp is currently generating about 0.22 per unit of volatility. If you would invest 21,950,000 in NCsoft Corp on September 4, 2024 and sell it today you would earn a total of 2,500,000 from holding NCsoft Corp or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. NCsoft Corp
Performance |
| Timeline |
| Kbi Metal |
| NCsoft Corp |
Kbi Metal and NCsoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and NCsoft Corp
The main advantage of trading using opposite Kbi Metal and NCsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, NCsoft Corp 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 NCsoft Corp will offset losses from the drop in NCsoft Corp's long position.| Kbi Metal vs. Korea Real Estate | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. UNISEM Co | Kbi Metal vs. RPBio Inc |
| NCsoft Corp vs. YG Entertainment | NCsoft Corp vs. TJ media Co | NCsoft Corp vs. Next Entertainment World | NCsoft Corp vs. Taeyang Metal Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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