Correlation Between Digital Power and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both Digital Power 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 Digital Power and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Netmarble Games Corp, you can compare the effects of market volatilities on Digital Power 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 Digital Power with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Netmarble Games.
Diversification Opportunities for Digital Power and Netmarble Games
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digital and Netmarble is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications 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 Digital Power 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 Digital Power Communications 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 Digital Power i.e., Digital Power and Netmarble Games go up and down completely randomly.
Pair Corralation between Digital Power and Netmarble Games
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 0.75 times more return on investment than Netmarble Games. However, Digital Power Communications is 1.33 times less risky than Netmarble Games. It trades about 0.04 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.01 per unit of risk. If you would invest 594,533 in Digital Power Communications on November 1, 2024 and sell it today you would earn a total of 223,467 from holding Digital Power Communications or generate 37.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Netmarble Games Corp
Performance |
| Timeline |
| Digital Power Commun |
| Netmarble Games Corp |
Digital Power and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Netmarble Games
The main advantage of trading using opposite Digital Power and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power 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.| Digital Power vs. FNSTech Co | Digital Power vs. V One Tech Co | Digital Power vs. Hyundai Industrial Co | Digital Power vs. Hyunwoo Industrial Co |
| Netmarble Games vs. KG Eco Technology | Netmarble Games vs. HB Technology TD | Netmarble Games vs. Grand Korea Leisure | Netmarble Games vs. Woori Technology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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