Correlation Between Genertec Universal and NEXON
Can any of the company-specific risk be diversified away by investing in both Genertec Universal 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 Genertec Universal and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genertec Universal Medical and NEXON Co, you can compare the effects of market volatilities on Genertec Universal 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 Genertec Universal with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genertec Universal and NEXON.
Diversification Opportunities for Genertec Universal and NEXON
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genertec and NEXON is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and Genertec Universal 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 Genertec Universal Medical 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 Genertec Universal i.e., Genertec Universal and NEXON go up and down completely randomly.
Pair Corralation between Genertec Universal and NEXON
Assuming the 90 days horizon Genertec Universal is expected to generate 6.03 times less return on investment than NEXON. But when comparing it to its historical volatility, Genertec Universal Medical is 1.78 times less risky than NEXON. It trades about 0.02 of its potential returns per unit of risk. NEXON Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 587.00 in NEXON Co on October 11, 2024 and sell it today you would earn a total of 743.00 from holding NEXON Co or generate 126.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genertec Universal Medical vs. NEXON Co
Performance |
| Timeline |
| Genertec Universal |
| NEXON |
Genertec Universal and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genertec Universal and NEXON
The main advantage of trading using opposite Genertec Universal and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genertec Universal 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.| Genertec Universal vs. CHRYSALIS INVESTMENTS LTD | Genertec Universal vs. New Residential Investment | Genertec Universal vs. ePlay Digital | Genertec Universal vs. LG Display Co |
| NEXON vs. Universal Insurance Holdings | NEXON vs. QBE Insurance Group | NEXON vs. Genertec Universal Medical | NEXON vs. CompuGroup Medical SE |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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