Correlation Between Netmarble Games and KEYEASTCoLtd
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and KEYEASTCoLtd 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 KEYEASTCoLtd 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 KEYEASTCoLtd, you can compare the effects of market volatilities on Netmarble Games and KEYEASTCoLtd 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 KEYEASTCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and KEYEASTCoLtd.
Diversification Opportunities for Netmarble Games and KEYEASTCoLtd
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netmarble and KEYEASTCoLtd is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and KEYEASTCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYEASTCoLtd 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 KEYEASTCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYEASTCoLtd has no effect on the direction of Netmarble Games i.e., Netmarble Games and KEYEASTCoLtd go up and down completely randomly.
Pair Corralation between Netmarble Games and KEYEASTCoLtd
Assuming the 90 days trading horizon Netmarble Games Corp is expected to under-perform the KEYEASTCoLtd. In addition to that, Netmarble Games is 1.29 times more volatile than KEYEASTCoLtd. It trades about -0.2 of its total potential returns per unit of risk. KEYEASTCoLtd is currently generating about 0.08 per unit of volatility. If you would invest 437,000 in KEYEASTCoLtd on August 28, 2024 and sell it today you would earn a total of 15,000 from holding KEYEASTCoLtd or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmarble Games Corp vs. KEYEASTCoLtd
Performance |
| Timeline |
| Netmarble Games Corp |
| KEYEASTCoLtd |
Netmarble Games and KEYEASTCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and KEYEASTCoLtd
The main advantage of trading using opposite Netmarble Games and KEYEASTCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, KEYEASTCoLtd 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 KEYEASTCoLtd will offset losses from the drop in KEYEASTCoLtd's long position.| Netmarble Games vs. AfreecaTV Co | Netmarble Games vs. SS TECH | Netmarble Games vs. Busan Industrial Co | Netmarble Games vs. Busan Ind |
| KEYEASTCoLtd vs. AfreecaTV Co | KEYEASTCoLtd vs. SS TECH | KEYEASTCoLtd vs. Busan Industrial Co | KEYEASTCoLtd vs. Busan Ind |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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