Correlation Between Bilibili and NEXON
Can any of the company-specific risk be diversified away by investing in both Bilibili 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 Bilibili and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilibili and NEXON Co, you can compare the effects of market volatilities on Bilibili 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 Bilibili with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and NEXON.
Diversification Opportunities for Bilibili and NEXON
Very weak diversification
The 3 months correlation between Bilibili and NEXON is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and Bilibili 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 Bilibili 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 Bilibili i.e., Bilibili and NEXON go up and down completely randomly.
Pair Corralation between Bilibili and NEXON
Assuming the 90 days trading horizon Bilibili is expected to generate 1.61 times more return on investment than NEXON. However, Bilibili is 1.61 times more volatile than NEXON Co. It trades about 0.04 of its potential returns per unit of risk. NEXON Co is currently generating about -0.1 per unit of risk. If you would invest 1,390 in Bilibili on October 25, 2024 and sell it today you would earn a total of 170.00 from holding Bilibili or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilibili vs. NEXON Co
Performance |
| Timeline |
| Bilibili |
| NEXON |
Bilibili and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilibili and NEXON
The main advantage of trading using opposite Bilibili and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili 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.| Bilibili vs. GEELY AUTOMOBILE | Bilibili vs. INTER CARS SA | Bilibili vs. SMA Solar Technology | Bilibili vs. Computershare Limited |
| NEXON vs. Citic Telecom International | NEXON vs. Comba Telecom Systems | NEXON vs. FIREWEED METALS P | NEXON vs. ADRIATIC METALS LS 013355 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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