Correlation Between Kakao Games and OCI Co
Can any of the company-specific risk be diversified away by investing in both Kakao Games and OCI Co 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 Kakao Games and OCI Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kakao Games Corp and OCI Co, you can compare the effects of market volatilities on Kakao Games and OCI Co 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 Kakao Games with a short position of OCI Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and OCI Co.
Diversification Opportunities for Kakao Games and OCI Co
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kakao and OCI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and OCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI Co and Kakao 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 Kakao Games Corp are associated (or correlated) with OCI Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI Co has no effect on the direction of Kakao Games i.e., Kakao Games and OCI Co go up and down completely randomly.
Pair Corralation between Kakao Games and OCI Co
Assuming the 90 days trading horizon Kakao Games Corp is expected to under-perform the OCI Co. But the stock apears to be less risky and, when comparing its historical volatility, Kakao Games Corp is 1.13 times less risky than OCI Co. The stock trades about -0.07 of its potential returns per unit of risk. The OCI Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 11,418,400 in OCI Co on September 12, 2024 and sell it today you would lose (5,438,400) from holding OCI Co or give up 47.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Kakao Games Corp vs. OCI Co
Performance |
| Timeline |
| Kakao Games Corp |
| OCI Co |
Kakao Games and OCI Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and OCI Co
The main advantage of trading using opposite Kakao Games and OCI Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games position performs unexpectedly, OCI Co 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 OCI Co will offset losses from the drop in OCI Co's long position.| Kakao Games vs. Devsisters corporation | Kakao Games vs. Konan Technology | Kakao Games vs. Nice Information Telecommunication | Kakao Games vs. SKONEC Entertainment Co |
| OCI Co vs. Grand Korea Leisure | OCI Co vs. Nable Communications | OCI Co vs. PLAYWITH | OCI Co vs. Kakao Games Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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