Correlation Between Netmarble Games and Pan Entertainment
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and Pan Entertainment 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 Pan Entertainment 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 Pan Entertainment Co, you can compare the effects of market volatilities on Netmarble Games and Pan Entertainment 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 Pan Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and Pan Entertainment.
Diversification Opportunities for Netmarble Games and Pan Entertainment
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netmarble and Pan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and Pan Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Entertainment 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 Pan Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Entertainment has no effect on the direction of Netmarble Games i.e., Netmarble Games and Pan Entertainment go up and down completely randomly.
Pair Corralation between Netmarble Games and Pan Entertainment
Assuming the 90 days trading horizon Netmarble Games Corp is expected to under-perform the Pan Entertainment. In addition to that, Netmarble Games is 2.31 times more volatile than Pan Entertainment Co. It trades about -0.2 of its total potential returns per unit of risk. Pan Entertainment Co is currently generating about -0.21 per unit of volatility. If you would invest 217,000 in Pan Entertainment Co on August 29, 2024 and sell it today you would lose (12,500) from holding Pan Entertainment Co or give up 5.76% 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. Pan Entertainment Co
Performance |
| Timeline |
| Netmarble Games Corp |
| Pan Entertainment |
Netmarble Games and Pan Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and Pan Entertainment
The main advantage of trading using opposite Netmarble Games and Pan Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, Pan Entertainment 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 Pan Entertainment will offset losses from the drop in Pan Entertainment's long position.| Netmarble Games vs. AfreecaTV Co | Netmarble Games vs. SS TECH | Netmarble Games vs. Busan Industrial Co | Netmarble Games vs. Busan Ind |
| Pan Entertainment vs. AfreecaTV Co | Pan Entertainment vs. SS TECH | Pan Entertainment vs. Busan Industrial Co | Pan Entertainment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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