Correlation Between Netmarble Games and Lake Materials
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and Lake Materials 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 Lake Materials 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 Lake Materials Co, you can compare the effects of market volatilities on Netmarble Games and Lake Materials 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 Lake Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and Lake Materials.
Diversification Opportunities for Netmarble Games and Lake Materials
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netmarble and Lake is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and Lake Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake 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 Lake Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Materials has no effect on the direction of Netmarble Games i.e., Netmarble Games and Lake Materials go up and down completely randomly.
Pair Corralation between Netmarble Games and Lake Materials
Assuming the 90 days trading horizon Netmarble Games Corp is expected to generate 0.67 times more return on investment than Lake Materials. However, Netmarble Games Corp is 1.5 times less risky than Lake Materials. It trades about 0.13 of its potential returns per unit of risk. Lake Materials Co is currently generating about -0.15 per unit of risk. If you would invest 4,005,000 in Netmarble Games Corp on January 23, 2025 and sell it today you would earn a total of 290,000 from holding Netmarble Games Corp or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmarble Games Corp vs. Lake Materials Co
Performance |
| Timeline |
| Netmarble Games Corp |
| Lake Materials |
Netmarble Games and Lake Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmarble Games and Lake Materials
The main advantage of trading using opposite Netmarble Games and Lake Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, Lake Materials 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 Lake Materials will offset losses from the drop in Lake Materials' long position.| Netmarble Games vs. Sam Chun Dang | Netmarble Games vs. Busan Industrial Co | Netmarble Games vs. Finebesteel | Netmarble Games vs. Shinhan Inverse WTI |
| Lake Materials vs. Hannong Chemicals | Lake Materials vs. Kbi Metal Co | Lake Materials vs. Hyosung Chemical Corp | Lake Materials vs. Daedong Metals Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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