Correlation Between LEENO Industrial and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial 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 LEENO Industrial and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Netmarble Games Corp, you can compare the effects of market volatilities on LEENO Industrial 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 LEENO Industrial with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Netmarble Games.
Diversification Opportunities for LEENO Industrial and Netmarble Games
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LEENO and Netmarble is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial 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 LEENO Industrial 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 LEENO Industrial 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 LEENO Industrial i.e., LEENO Industrial and Netmarble Games go up and down completely randomly.
Pair Corralation between LEENO Industrial and Netmarble Games
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 1.14 times more return on investment than Netmarble Games. However, LEENO Industrial is 1.14 times more volatile than Netmarble Games Corp. It trades about 0.33 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.19 per unit of risk. If you would invest 15,192,500 in LEENO Industrial on October 30, 2024 and sell it today you would earn a total of 6,357,500 from holding LEENO Industrial or generate 41.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Netmarble Games Corp
Performance |
| Timeline |
| LEENO Industrial |
| Netmarble Games Corp |
LEENO Industrial and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Netmarble Games
The main advantage of trading using opposite LEENO Industrial and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial 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.| LEENO Industrial vs. Tokai Carbon Korea | LEENO Industrial vs. LF Co | LEENO Industrial vs. Koh Young Technology |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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