Correlation Between DAEDUCK ELECTRONICS and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS and Netmarble Games 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 DAEDUCK ELECTRONICS and Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEDUCK ELECTRONICS CoLtd and Netmarble Games Corp, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS and Netmarble Games 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 DAEDUCK ELECTRONICS with a short position of Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Netmarble Games.
Diversification Opportunities for DAEDUCK ELECTRONICS and Netmarble Games
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAEDUCK and Netmarble is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Netmarble Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmarble Games Corp and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd are associated (or correlated) with Netmarble Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmarble Games Corp has no effect on the direction of DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Netmarble Games go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Netmarble Games
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.75 times more return on investment than Netmarble Games. However, DAEDUCK ELECTRONICS CoLtd is 1.34 times less risky than Netmarble Games. It trades about -0.03 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.54 per unit of risk. If you would invest 825,000 in DAEDUCK ELECTRONICS CoLtd on November 7, 2024 and sell it today you would lose (7,000) from holding DAEDUCK ELECTRONICS CoLtd or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Netmarble Games Corp
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Netmarble Games Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DAEDUCK ELECTRONICS and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Netmarble Games
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS position performs unexpectedly, Netmarble Games 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 Netmarble Games will offset losses from the drop in Netmarble Games' long position.The idea behind DAEDUCK ELECTRONICS CoLtd and Netmarble Games Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Netmarble Games vs. PH Tech Co | Netmarble Games vs. ISU Chemical Co | Netmarble Games vs. SS TECH | Netmarble Games vs. SH Energy Chemical |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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