Correlation Between Mgame Corp and Korean Drug
Can any of the company-specific risk be diversified away by investing in both Mgame Corp and Korean Drug 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 Mgame Corp and Korean Drug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mgame Corp and Korean Drug Co, you can compare the effects of market volatilities on Mgame Corp and Korean Drug 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 Mgame Corp with a short position of Korean Drug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mgame Corp and Korean Drug.
Diversification Opportunities for Mgame Corp and Korean Drug
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mgame and Korean is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mgame Corp and Korean Drug Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Drug and Mgame 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 Mgame Corp are associated (or correlated) with Korean Drug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Drug has no effect on the direction of Mgame Corp i.e., Mgame Corp and Korean Drug go up and down completely randomly.
Pair Corralation between Mgame Corp and Korean Drug
Assuming the 90 days trading horizon Mgame Corp is expected to under-perform the Korean Drug. But the stock apears to be less risky and, when comparing its historical volatility, Mgame Corp is 2.8 times less risky than Korean Drug. The stock trades about -0.15 of its potential returns per unit of risk. The Korean Drug Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 425,957 in Korean Drug Co on October 12, 2024 and sell it today you would earn a total of 66,043 from holding Korean Drug Co or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mgame Corp vs. Korean Drug Co
Performance |
| Timeline |
| Mgame Corp |
| Korean Drug |
Mgame Corp and Korean Drug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mgame Corp and Korean Drug
The main advantage of trading using opposite Mgame Corp and Korean Drug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mgame Corp position performs unexpectedly, Korean Drug 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 Korean Drug will offset losses from the drop in Korean Drug's long position.| Mgame Corp vs. Youngsin Metal Industrial | Mgame Corp vs. Daejung Chemicals Metals | Mgame Corp vs. Kukil Metal Co | Mgame Corp vs. CJ Seafood Corp |
| Korean Drug vs. Aprogen Healthcare Games | Korean Drug vs. iNtRON Biotechnology | Korean Drug vs. Mgame Corp | Korean Drug vs. Hwangkum Steel 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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