Correlation Between TROPHY GAMES and NEXON Co
Can any of the company-specific risk be diversified away by investing in both TROPHY GAMES and NEXON 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 TROPHY GAMES and NEXON Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TROPHY GAMES DEV and NEXON Co, you can compare the effects of market volatilities on TROPHY GAMES and NEXON 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 TROPHY GAMES with a short position of NEXON Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of TROPHY GAMES and NEXON Co.
Diversification Opportunities for TROPHY GAMES and NEXON Co
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TROPHY and NEXON is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TROPHY GAMES DEV and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON Co and TROPHY 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 TROPHY GAMES DEV are associated (or correlated) with NEXON Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON Co has no effect on the direction of TROPHY GAMES i.e., TROPHY GAMES and NEXON Co go up and down completely randomly.
Pair Corralation between TROPHY GAMES and NEXON Co
Assuming the 90 days horizon TROPHY GAMES is expected to generate 1.67 times less return on investment than NEXON Co. But when comparing it to its historical volatility, TROPHY GAMES DEV is 1.88 times less risky than NEXON Co. It trades about 0.07 of its potential returns per unit of risk. NEXON Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 823.00 in NEXON Co on September 3, 2024 and sell it today you would earn a total of 457.00 from holding NEXON Co or generate 55.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TROPHY GAMES DEV vs. NEXON Co
Performance |
| Timeline |
| TROPHY GAMES DEV |
| NEXON Co |
TROPHY GAMES and NEXON Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TROPHY GAMES and NEXON Co
The main advantage of trading using opposite TROPHY GAMES and NEXON Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TROPHY GAMES position performs unexpectedly, NEXON 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 NEXON Co will offset losses from the drop in NEXON Co's long position.| TROPHY GAMES vs. Nintendo Co | TROPHY GAMES vs. Nintendo Co | TROPHY GAMES vs. Sea Limited | TROPHY GAMES vs. Take Two Interactive Software |
| NEXON Co vs. Nintendo Co | NEXON Co vs. Nintendo Co | NEXON Co vs. Sea Limited | NEXON Co vs. Take Two Interactive Software |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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