Correlation Between Guidewire Software and NEXON
Can any of the company-specific risk be diversified away by investing in both Guidewire Software and NEXON 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 Guidewire Software and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidewire Software and NEXON Co, you can compare the effects of market volatilities on Guidewire Software and NEXON 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 Guidewire Software with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidewire Software and NEXON.
Diversification Opportunities for Guidewire Software and NEXON
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guidewire and NEXON is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and Guidewire Software 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 Guidewire Software are associated (or correlated) with NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of Guidewire Software i.e., Guidewire Software and NEXON go up and down completely randomly.
Pair Corralation between Guidewire Software and NEXON
Assuming the 90 days trading horizon Guidewire Software is expected to under-perform the NEXON. In addition to that, Guidewire Software is 1.89 times more volatile than NEXON Co. It trades about -0.14 of its total potential returns per unit of risk. NEXON Co is currently generating about 0.2 per unit of volatility. If you would invest 1,260 in NEXON Co on September 14, 2024 and sell it today you would earn a total of 110.00 from holding NEXON Co or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidewire Software vs. NEXON Co
Performance |
| Timeline |
| Guidewire Software |
| NEXON |
Guidewire Software and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidewire Software and NEXON
The main advantage of trading using opposite Guidewire Software and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidewire Software position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc |
| NEXON vs. FORMPIPE SOFTWARE AB | NEXON vs. EPSILON HEALTHCARE LTD | NEXON vs. UPDATE SOFTWARE | NEXON vs. Guidewire Software |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |