Correlation Between EBEST Investment and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Mgame 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 Mgame 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 Mgame Corp, you can compare the effects of market volatilities on EBEST Investment and Mgame 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 Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Mgame Corp.
Diversification Opportunities for EBEST Investment and Mgame Corp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EBEST and Mgame is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame 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 Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of EBEST Investment i.e., EBEST Investment and Mgame Corp go up and down completely randomly.
Pair Corralation between EBEST Investment and Mgame Corp
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.79 times more return on investment than Mgame Corp. However, EBEST Investment Securities is 1.26 times less risky than Mgame Corp. It trades about -0.02 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.03 per unit of risk. If you would invest 471,478 in EBEST Investment Securities on October 16, 2024 and sell it today you would lose (100,978) from holding EBEST Investment Securities or give up 21.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.03% |
| Values | Daily Returns |
EBEST Investment Securities vs. Mgame Corp
Performance |
| Timeline |
| EBEST Investment Sec |
| Mgame Corp |
EBEST Investment and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Mgame Corp
The main advantage of trading using opposite EBEST Investment and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Mgame 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| EBEST Investment vs. Pureun Mutual Savings | EBEST Investment vs. Seoul Food Industrial | EBEST Investment vs. KTB Investment Securities | EBEST Investment vs. Foodnamoo |
| Mgame Corp vs. System and Application | Mgame Corp vs. EBEST Investment Securities | Mgame Corp vs. Lotte Data Communication | Mgame Corp vs. Moadata 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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