Correlation Between Insung Information and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both Insung Information and Mgame 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 Insung Information and Mgame Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Mgame Corp, you can compare the effects of market volatilities on Insung Information and Mgame 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 Insung Information with a short position of Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Mgame Corp.
Diversification Opportunities for Insung Information and Mgame Corp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insung and Mgame is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp and Insung Information 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 Insung Information Co are associated (or correlated) with Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of Insung Information i.e., Insung Information and Mgame Corp go up and down completely randomly.
Pair Corralation between Insung Information and Mgame Corp
Assuming the 90 days trading horizon Insung Information Co is expected to generate 2.14 times more return on investment than Mgame Corp. However, Insung Information is 2.14 times more volatile than Mgame Corp. It trades about 0.03 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.02 per unit of risk. If you would invest 178,035 in Insung Information Co on August 30, 2024 and sell it today you would earn a total of 15,565 from holding Insung Information Co or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.63% |
| Values | Daily Returns |
Insung Information Co vs. Mgame Corp
Performance |
| Timeline |
| Insung Information |
| Mgame Corp |
Insung Information and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Mgame Corp
The main advantage of trading using opposite Insung Information and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Mgame 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| Insung Information vs. Daou Data Corp | Insung Information vs. Busan Industrial Co | Insung Information vs. Busan Ind | Insung Information vs. Shinhan WTI Futures |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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