Correlation Between EBEST Investment and NCsoft Corp
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and NCsoft Corp 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 EBEST Investment and NCsoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and NCsoft Corp, you can compare the effects of market volatilities on EBEST Investment and NCsoft Corp 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 EBEST Investment with a short position of NCsoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and NCsoft Corp.
Diversification Opportunities for EBEST Investment and NCsoft Corp
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and NCsoft is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and NCsoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCsoft Corp and EBEST 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 EBEST Investment Securities are associated (or correlated) with NCsoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCsoft Corp has no effect on the direction of EBEST Investment i.e., EBEST Investment and NCsoft Corp go up and down completely randomly.
Pair Corralation between EBEST Investment and NCsoft Corp
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the NCsoft Corp. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.61 times less risky than NCsoft Corp. The stock trades about -0.08 of its potential returns per unit of risk. The NCsoft Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 18,210,000 in NCsoft Corp on September 3, 2024 and sell it today you would earn a total of 5,540,000 from holding NCsoft Corp or generate 30.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. NCsoft Corp
Performance |
| Timeline |
| EBEST Investment Sec |
| NCsoft Corp |
EBEST Investment and NCsoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and NCsoft Corp
The main advantage of trading using opposite EBEST Investment and NCsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, NCsoft Corp 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 NCsoft Corp will offset losses from the drop in NCsoft Corp's long position.| EBEST Investment vs. Worldex Industry Trading | EBEST Investment vs. Woori Technology Investment | EBEST Investment vs. SBI Investment KOREA | EBEST Investment vs. Lindeman Asia Investment |
| NCsoft Corp vs. Kbi Metal Co | NCsoft Corp vs. Hannong Chemicals | NCsoft Corp vs. Taeyang Metal Industrial | NCsoft Corp vs. Daejung Chemicals Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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