Correlation Between Netmarble Games and INNOX Advanced
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and INNOX Advanced 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 INNOX Advanced 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 INNOX Advanced Materials, you can compare the effects of market volatilities on Netmarble Games and INNOX Advanced 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 INNOX Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and INNOX Advanced.
Diversification Opportunities for Netmarble Games and INNOX Advanced
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Netmarble and INNOX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and INNOX Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOX Advanced Materials 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 INNOX Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOX Advanced Materials has no effect on the direction of Netmarble Games i.e., Netmarble Games and INNOX Advanced go up and down completely randomly.
Pair Corralation between Netmarble Games and INNOX Advanced
Assuming the 90 days trading horizon Netmarble Games Corp is expected to generate 1.31 times more return on investment than INNOX Advanced. However, Netmarble Games is 1.31 times more volatile than INNOX Advanced Materials. It trades about -0.12 of its potential returns per unit of risk. INNOX Advanced Materials is currently generating about -0.26 per unit of risk. If you would invest 5,800,000 in Netmarble Games Corp on September 1, 2024 and sell it today you would lose (500,000) from holding Netmarble Games Corp or give up 8.62% 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. INNOX Advanced Materials
Performance |
| Timeline |
| Netmarble Games Corp |
| INNOX Advanced Materials |
Netmarble Games and INNOX Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and INNOX Advanced
The main advantage of trading using opposite Netmarble Games and INNOX Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, INNOX Advanced 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 INNOX Advanced will offset losses from the drop in INNOX Advanced's long position.| Netmarble Games vs. AfreecaTV Co | Netmarble Games vs. Seegene | Netmarble Games vs. SS TECH | Netmarble Games vs. Busan Industrial Co |
| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. Tokai Carbon Korea | INNOX Advanced vs. People Technology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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