Correlation Between NCsoft Corp and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both NCsoft Corp and Kbi Metal 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 NCsoft Corp and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NCsoft Corp and Kbi Metal Co, you can compare the effects of market volatilities on NCsoft Corp and Kbi Metal 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 NCsoft Corp with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCsoft Corp and Kbi Metal.
Diversification Opportunities for NCsoft Corp and Kbi Metal
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NCsoft and Kbi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding NCsoft Corp and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and NCsoft Corp 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 NCsoft Corp are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of NCsoft Corp i.e., NCsoft Corp and Kbi Metal go up and down completely randomly.
Pair Corralation between NCsoft Corp and Kbi Metal
Assuming the 90 days trading horizon NCsoft Corp is expected to generate 0.83 times more return on investment than Kbi Metal. However, NCsoft Corp is 1.21 times less risky than Kbi Metal. It trades about 0.17 of its potential returns per unit of risk. Kbi Metal Co is currently generating about -0.53 per unit of risk. If you would invest 21,950,000 in NCsoft Corp on September 3, 2024 and sell it today you would earn a total of 1,800,000 from holding NCsoft Corp or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NCsoft Corp vs. Kbi Metal Co
Performance |
| Timeline |
| NCsoft Corp |
| Kbi Metal |
NCsoft Corp and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCsoft Corp and Kbi Metal
The main advantage of trading using opposite NCsoft Corp and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCsoft Corp position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| NCsoft Corp vs. Kbi Metal Co | NCsoft Corp vs. Hannong Chemicals | NCsoft Corp vs. Taeyang Metal Industrial | NCsoft Corp vs. Daejung Chemicals Metals |
| Kbi Metal vs. Korea Real Estate | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. UNISEM Co | Kbi Metal vs. RPBio Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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