Correlation Between Netmarble Games and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and Iljin Display 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 Iljin Display 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 Iljin Display, you can compare the effects of market volatilities on Netmarble Games and Iljin Display 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 Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and Iljin Display.
Diversification Opportunities for Netmarble Games and Iljin Display
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Netmarble and Iljin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display 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 Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of Netmarble Games i.e., Netmarble Games and Iljin Display go up and down completely randomly.
Pair Corralation between Netmarble Games and Iljin Display
Assuming the 90 days trading horizon Netmarble Games Corp is expected to generate 2.78 times more return on investment than Iljin Display. However, Netmarble Games is 2.78 times more volatile than Iljin Display. It trades about -0.09 of its potential returns per unit of risk. Iljin Display is currently generating about -0.38 per unit of risk. If you would invest 5,950,000 in Netmarble Games Corp on September 3, 2024 and sell it today you would lose (650,000) from holding Netmarble Games Corp or give up 10.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmarble Games Corp vs. Iljin Display
Performance |
| Timeline |
| Netmarble Games Corp |
| Iljin Display |
Netmarble Games and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and Iljin Display
The main advantage of trading using opposite Netmarble Games and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| Netmarble Games vs. Seoul Food Industrial | Netmarble Games vs. Foodnamoo | Netmarble Games vs. KB Financial Group | Netmarble Games vs. FOODWELL Co |
| Iljin Display vs. Hankook Steel Co | Iljin Display vs. Genie Music | Iljin Display vs. Korea Shipbuilding Offshore | Iljin Display vs. Hanil Iron Steel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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