Correlation Between REGAL ASIAN and NEXON
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN 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 REGAL ASIAN and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and NEXON Co, you can compare the effects of market volatilities on REGAL ASIAN 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 REGAL ASIAN with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and NEXON.
Diversification Opportunities for REGAL ASIAN and NEXON
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between REGAL and NEXON is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and NEXON go up and down completely randomly.
Pair Corralation between REGAL ASIAN and NEXON
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the NEXON. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 14.41 times less risky than NEXON. The stock trades about -0.2 of its potential returns per unit of risk. The NEXON Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,580 in NEXON Co on September 27, 2024 and sell it today you would lose (180.00) from holding NEXON Co or give up 11.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. NEXON Co
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| NEXON |
REGAL ASIAN and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and NEXON
The main advantage of trading using opposite REGAL ASIAN and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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.| REGAL ASIAN vs. Coeur Mining | REGAL ASIAN vs. MCEWEN MINING INC | REGAL ASIAN vs. BOS BETTER ONLINE | REGAL ASIAN vs. Harmony Gold Mining |
| NEXON vs. New Residential Investment | NEXON vs. REGAL ASIAN INVESTMENTS | NEXON vs. Virtus Investment Partners | NEXON vs. Gladstone 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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