Correlation Between System and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both System 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 System and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System and Application and Netmarble Games Corp, you can compare the effects of market volatilities on System 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 System with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Netmarble Games.
Diversification Opportunities for System and Netmarble Games
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between System and Netmarble is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding System and Application 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 System 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 System and Application 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 System i.e., System and Netmarble Games go up and down completely randomly.
Pair Corralation between System and Netmarble Games
Assuming the 90 days trading horizon System and Application is expected to generate 1.48 times more return on investment than Netmarble Games. However, System is 1.48 times more volatile than Netmarble Games Corp. It trades about -0.14 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.54 per unit of risk. If you would invest 157,100 in System and Application on November 6, 2024 and sell it today you would lose (10,900) from holding System and Application or give up 6.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
System and Application vs. Netmarble Games Corp
Performance |
| Timeline |
| System and Application |
| Netmarble Games Corp |
System and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Netmarble Games
The main advantage of trading using opposite System and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System 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.| System vs. Nice Information Telecommunication | System vs. Digital Power Communications | System vs. Inzi Display CoLtd | System vs. Insung Information Co |
| Netmarble Games vs. Digital Power Communications | Netmarble Games vs. Korea Information Communications | Netmarble Games vs. Kisan Telecom Co | Netmarble Games vs. YeaRimDang Publishing Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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