Correlation Between AfreecaTV and NEOWIZ HOLDINGS
Can any of the company-specific risk be diversified away by investing in both AfreecaTV and NEOWIZ HOLDINGS 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 AfreecaTV and NEOWIZ HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfreecaTV Co and NEOWIZ HOLDINGS, you can compare the effects of market volatilities on AfreecaTV and NEOWIZ HOLDINGS 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 AfreecaTV with a short position of NEOWIZ HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfreecaTV and NEOWIZ HOLDINGS.
Diversification Opportunities for AfreecaTV and NEOWIZ HOLDINGS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AfreecaTV and NEOWIZ is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AfreecaTV Co and NEOWIZ HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOWIZ HOLDINGS and AfreecaTV 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 AfreecaTV Co are associated (or correlated) with NEOWIZ HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOWIZ HOLDINGS has no effect on the direction of AfreecaTV i.e., AfreecaTV and NEOWIZ HOLDINGS go up and down completely randomly.
Pair Corralation between AfreecaTV and NEOWIZ HOLDINGS
Assuming the 90 days trading horizon AfreecaTV Co is expected to generate 1.22 times more return on investment than NEOWIZ HOLDINGS. However, AfreecaTV is 1.22 times more volatile than NEOWIZ HOLDINGS. It trades about 0.23 of its potential returns per unit of risk. NEOWIZ HOLDINGS is currently generating about -0.17 per unit of risk. If you would invest 9,600,000 in AfreecaTV Co on September 1, 2024 and sell it today you would earn a total of 1,430,000 from holding AfreecaTV Co or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AfreecaTV Co vs. NEOWIZ HOLDINGS
Performance |
| Timeline |
| AfreecaTV |
| NEOWIZ HOLDINGS |
AfreecaTV and NEOWIZ HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfreecaTV and NEOWIZ HOLDINGS
The main advantage of trading using opposite AfreecaTV and NEOWIZ HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfreecaTV position performs unexpectedly, NEOWIZ HOLDINGS 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 NEOWIZ HOLDINGS will offset losses from the drop in NEOWIZ HOLDINGS's long position.The idea behind AfreecaTV Co and NEOWIZ HOLDINGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NEOWIZ HOLDINGS vs. AfreecaTV Co | NEOWIZ HOLDINGS vs. Seegene | NEOWIZ HOLDINGS vs. SS TECH | NEOWIZ HOLDINGS vs. Busan Industrial 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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