Correlation Between Kakao Games and LabGenomics
Can any of the company-specific risk be diversified away by investing in both Kakao Games and LabGenomics 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 LabGenomics 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 LabGenomics Co, you can compare the effects of market volatilities on Kakao Games and LabGenomics 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 LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and LabGenomics.
Diversification Opportunities for Kakao Games and LabGenomics
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kakao and LabGenomics is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics 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 LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Kakao Games i.e., Kakao Games and LabGenomics go up and down completely randomly.
Pair Corralation between Kakao Games and LabGenomics
Assuming the 90 days trading horizon Kakao Games Corp is expected to under-perform the LabGenomics. But the stock apears to be less risky and, when comparing its historical volatility, Kakao Games Corp is 1.86 times less risky than LabGenomics. The stock trades about -0.07 of its potential returns per unit of risk. The LabGenomics Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 282,500 in LabGenomics Co on December 1, 2024 and sell it today you would lose (14,500) from holding LabGenomics Co or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kakao Games Corp vs. LabGenomics Co
Performance |
| Timeline |
| Kakao Games Corp |
| LabGenomics |
Kakao Games and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and LabGenomics
The main advantage of trading using opposite Kakao Games and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games position performs unexpectedly, LabGenomics 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 LabGenomics will offset losses from the drop in LabGenomics' long position.| Kakao Games vs. Posco ICT | Kakao Games vs. Devsisters corporation | Kakao Games vs. Konan Technology | Kakao Games vs. Alchera |
| LabGenomics vs. LG Household Healthcare | LabGenomics vs. SK Chemicals Co | LabGenomics vs. CKH Food Health | LabGenomics vs. Kukdo Chemical 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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