Correlation Between ABOV Semiconductor and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor 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 ABOV Semiconductor and Mgame Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and Mgame Corp, you can compare the effects of market volatilities on ABOV Semiconductor 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 ABOV Semiconductor with a short position of Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Mgame Corp.
Diversification Opportunities for ABOV Semiconductor and Mgame Corp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABOV and Mgame is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp and ABOV Semiconductor 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 ABOV Semiconductor Co 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 ABOV Semiconductor i.e., ABOV Semiconductor and Mgame Corp go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Mgame Corp
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 2.13 times more return on investment than Mgame Corp. However, ABOV Semiconductor is 2.13 times more volatile than Mgame Corp. It trades about 0.19 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.28 per unit of risk. If you would invest 783,000 in ABOV Semiconductor Co on October 14, 2024 and sell it today you would earn a total of 74,000 from holding ABOV Semiconductor Co or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Mgame Corp
Performance |
| Timeline |
| ABOV Semiconductor |
| Mgame Corp |
ABOV Semiconductor and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Mgame Corp
The main advantage of trading using opposite ABOV Semiconductor and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor 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.| ABOV Semiconductor vs. Miwon Chemicals Co | ABOV Semiconductor vs. Kukdo Chemical Co | ABOV Semiconductor vs. Kyung In Synthetic Corp | ABOV Semiconductor vs. SK Chemicals Co |
| Mgame Corp vs. ABOV Semiconductor Co | Mgame Corp vs. Kakao Games Corp | Mgame Corp vs. Samsung Life Insurance | Mgame Corp vs. Daesung 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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