Correlation Between Korea Investment and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both Korea Investment 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 Korea Investment and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and Netmarble Games Corp, you can compare the effects of market volatilities on Korea Investment 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 Korea Investment with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Netmarble Games.
Diversification Opportunities for Korea Investment and Netmarble Games
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Netmarble is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings 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 Korea Investment 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 Investment Holdings 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 Korea Investment i.e., Korea Investment and Netmarble Games go up and down completely randomly.
Pair Corralation between Korea Investment and Netmarble Games
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.47 times more return on investment than Netmarble Games. However, Korea Investment Holdings is 2.15 times less risky than Netmarble Games. It trades about 0.04 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.01 per unit of risk. If you would invest 4,452,253 in Korea Investment Holdings on November 2, 2024 and sell it today you would earn a total of 1,187,747 from holding Korea Investment Holdings or generate 26.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. Netmarble Games Corp
Performance |
| Timeline |
| Korea Investment Holdings |
| Netmarble Games Corp |
Korea Investment and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Netmarble Games
The main advantage of trading using opposite Korea Investment and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment 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.| Korea Investment vs. Namhwa Industrial Co | Korea Investment vs. KG Eco Technology | Korea Investment vs. Daejung Chemicals Metals | Korea Investment vs. ENF Technology Co |
| Netmarble Games vs. Pureun Mutual Savings | Netmarble Games vs. Daiyang Metal Co | Netmarble Games vs. Hana Financial | Netmarble Games vs. Dongil Metal 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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