Correlation Between YG Entertainment and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both YG Entertainment 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 YG Entertainment and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Netmarble Games Corp, you can compare the effects of market volatilities on YG Entertainment 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 YG Entertainment with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Netmarble Games.
Diversification Opportunities for YG Entertainment and Netmarble Games
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 122870 and Netmarble is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment 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 YG Entertainment 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 YG Entertainment 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 YG Entertainment i.e., YG Entertainment and Netmarble Games go up and down completely randomly.
Pair Corralation between YG Entertainment and Netmarble Games
Assuming the 90 days trading horizon YG Entertainment is expected to under-perform the Netmarble Games. But the stock apears to be less risky and, when comparing its historical volatility, YG Entertainment is 1.04 times less risky than Netmarble Games. The stock trades about -0.03 of its potential returns per unit of risk. The Netmarble Games Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,805,000 in Netmarble Games Corp on September 12, 2024 and sell it today you would earn a total of 645,000 from holding Netmarble Games Corp or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. Netmarble Games Corp
Performance |
| Timeline |
| YG Entertainment |
| Netmarble Games Corp |
YG Entertainment and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Netmarble Games
The main advantage of trading using opposite YG Entertainment and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment 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.| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment Co |
| Netmarble Games vs. YG Entertainment | Netmarble Games vs. JYP Entertainment | Netmarble Games vs. Cube Entertainment | Netmarble Games vs. FNC Entertainment 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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