Correlation Between Netmarble Games and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on Netmarble Games and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and Daesung Hi.
Diversification Opportunities for Netmarble Games and Daesung Hi
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netmarble and Daesung is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Netmarble Games i.e., Netmarble Games and Daesung Hi go up and down completely randomly.
Pair Corralation between Netmarble Games and Daesung Hi
Assuming the 90 days trading horizon Netmarble Games Corp is expected to generate 1.33 times more return on investment than Daesung Hi. However, Netmarble Games is 1.33 times more volatile than Daesung Hi Tech Co. It trades about -0.09 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.26 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmarble Games Corp vs. Daesung Hi Tech Co
Performance |
| Timeline |
| Netmarble Games Corp |
| Daesung Hi Tech |
Netmarble Games and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and Daesung Hi
The main advantage of trading using opposite Netmarble Games and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| Netmarble Games vs. Seoul Food Industrial | Netmarble Games vs. Foodnamoo | Netmarble Games vs. KB Financial Group | Netmarble Games vs. FOODWELL Co |
| Daesung Hi vs. Bohae Brewery | Daesung Hi vs. Clean Science co | Daesung Hi vs. Korea Investment Holdings | Daesung Hi vs. Nh Investment And |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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