Correlation Between Netmarble Games and Automobile
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and Automobile 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 Netmarble Games and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netmarble Games Corp and Automobile Pc, you can compare the effects of market volatilities on Netmarble Games and Automobile 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 Netmarble Games with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and Automobile.
Diversification Opportunities for Netmarble Games and Automobile
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netmarble and Automobile is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Netmarble Games 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 Netmarble Games Corp are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Netmarble Games i.e., Netmarble Games and Automobile go up and down completely randomly.
Pair Corralation between Netmarble Games and Automobile
Assuming the 90 days trading horizon Netmarble Games Corp is expected to under-perform the Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Netmarble Games Corp is 1.1 times less risky than Automobile. The stock trades about -0.41 of its potential returns per unit of risk. The Automobile Pc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 57,000 in Automobile Pc on October 28, 2024 and sell it today you would lose (1,000.00) from holding Automobile Pc or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmarble Games Corp vs. Automobile Pc
Performance |
| Timeline |
| Netmarble Games Corp |
| Automobile Pc |
Netmarble Games and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and Automobile
The main advantage of trading using opposite Netmarble Games and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Netmarble Games vs. NICE Information Service | Netmarble Games vs. System and Application | Netmarble Games vs. LG Household Healthcare | Netmarble Games vs. LG Household Healthcare |
| Automobile vs. Samsung Electronics Co | Automobile vs. Samsung Electronics Co | Automobile vs. KB Financial Group | Automobile vs. Shinhan Financial Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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