Correlation Between Korea New and GAMEVIL
Can any of the company-specific risk be diversified away by investing in both Korea New and GAMEVIL 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 Korea New and GAMEVIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and GAMEVIL, you can compare the effects of market volatilities on Korea New and GAMEVIL 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 Korea New with a short position of GAMEVIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and GAMEVIL.
Diversification Opportunities for Korea New and GAMEVIL
Average diversification
The 3 months correlation between Korea and GAMEVIL is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and GAMEVIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMEVIL and Korea New 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 Korea New Network are associated (or correlated) with GAMEVIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMEVIL has no effect on the direction of Korea New i.e., Korea New and GAMEVIL go up and down completely randomly.
Pair Corralation between Korea New and GAMEVIL
Assuming the 90 days trading horizon Korea New Network is expected to under-perform the GAMEVIL. But the stock apears to be less risky and, when comparing its historical volatility, Korea New Network is 4.06 times less risky than GAMEVIL. The stock trades about -0.05 of its potential returns per unit of risk. The GAMEVIL is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,305,000 in GAMEVIL on August 30, 2024 and sell it today you would earn a total of 875,000 from holding GAMEVIL or generate 37.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. GAMEVIL
Performance |
| Timeline |
| Korea New Network |
| GAMEVIL |
Korea New and GAMEVIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and GAMEVIL
The main advantage of trading using opposite Korea New and GAMEVIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, GAMEVIL 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 GAMEVIL will offset losses from the drop in GAMEVIL's long position.| Korea New vs. Hyundai Engineering Plastics | Korea New vs. Dongwon Metal Co | Korea New vs. Taeyang Metal Industrial | Korea New vs. LS Materials |
| GAMEVIL vs. Korea New Network | GAMEVIL vs. Busan Industrial Co | GAMEVIL vs. Busan Ind | GAMEVIL vs. Shinhan WTI Futures |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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