Correlation Between Kakao Games and MetaLabs
Can any of the company-specific risk be diversified away by investing in both Kakao Games and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on Kakao Games and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and MetaLabs.
Diversification Opportunities for Kakao Games and MetaLabs
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kakao and MetaLabs is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Kakao Games i.e., Kakao Games and MetaLabs go up and down completely randomly.
Pair Corralation between Kakao Games and MetaLabs
Assuming the 90 days trading horizon Kakao Games Corp is expected to generate 0.73 times more return on investment than MetaLabs. However, Kakao Games Corp is 1.37 times less risky than MetaLabs. It trades about -0.08 of its potential returns per unit of risk. MetaLabs Co is currently generating about -0.06 per unit of risk. If you would invest 4,700,000 in Kakao Games Corp on October 12, 2024 and sell it today you would lose (3,029,000) from holding Kakao Games Corp or give up 64.45% 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. MetaLabs Co
Performance |
| Timeline |
| Kakao Games Corp |
| MetaLabs |
Kakao Games and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and MetaLabs
The main advantage of trading using opposite Kakao Games and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| Kakao Games vs. Posco ICT | Kakao Games vs. Devsisters corporation | Kakao Games vs. Konan Technology | Kakao Games vs. Alchera |
| MetaLabs vs. Iljin Display | MetaLabs vs. Atinum Investment Co | MetaLabs vs. Kakao Games Corp | MetaLabs vs. DSC Investment |
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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