Correlation Between MOVIE GAMES and NEXON
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and NEXON 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 MOVIE GAMES and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and NEXON Co, you can compare the effects of market volatilities on MOVIE GAMES and NEXON 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 MOVIE GAMES with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and NEXON.
Diversification Opportunities for MOVIE GAMES and NEXON
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MOVIE and NEXON is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and MOVIE 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 MOVIE GAMES SA are associated (or correlated) with NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and NEXON go up and down completely randomly.
Pair Corralation between MOVIE GAMES and NEXON
Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 2.1 times more return on investment than NEXON. However, MOVIE GAMES is 2.1 times more volatile than NEXON Co. It trades about 0.18 of its potential returns per unit of risk. NEXON Co is currently generating about -0.19 per unit of risk. If you would invest 356.00 in MOVIE GAMES SA on October 26, 2024 and sell it today you would earn a total of 53.00 from holding MOVIE GAMES SA or generate 14.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. NEXON Co
Performance |
| Timeline |
| MOVIE GAMES SA |
| NEXON |
MOVIE GAMES and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and NEXON
The main advantage of trading using opposite MOVIE GAMES and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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