Correlation Between NEXON Co and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both NEXON Co and TROPHY 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 NEXON Co and TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and TROPHY GAMES DEV, you can compare the effects of market volatilities on NEXON Co and TROPHY 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 NEXON Co with a short position of TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON Co and TROPHY GAMES.
Diversification Opportunities for NEXON Co and TROPHY GAMES
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NEXON and TROPHY is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV and NEXON Co 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 NEXON Co are associated (or correlated) with TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of NEXON Co i.e., NEXON Co and TROPHY GAMES go up and down completely randomly.
Pair Corralation between NEXON Co and TROPHY GAMES
Assuming the 90 days horizon NEXON Co is expected to under-perform the TROPHY GAMES. In addition to that, NEXON Co is 1.08 times more volatile than TROPHY GAMES DEV. It trades about -0.13 of its total potential returns per unit of risk. TROPHY GAMES DEV is currently generating about -0.06 per unit of volatility. If you would invest 98.00 in TROPHY GAMES DEV on November 6, 2024 and sell it today you would lose (12.00) from holding TROPHY GAMES DEV or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXON Co vs. TROPHY GAMES DEV
Performance |
| Timeline |
| NEXON Co |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TROPHY GAMES DEV |
NEXON Co and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON Co and TROPHY GAMES
The main advantage of trading using opposite NEXON Co and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON Co position performs unexpectedly, TROPHY 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| NEXON Co vs. CEOTRONICS | NEXON Co vs. EPSILON HEALTHCARE LTD | NEXON Co vs. Brockhaus Capital Management | NEXON Co vs. SIERRA METALS |
| TROPHY GAMES vs. GRIFFIN MINING LTD | TROPHY GAMES vs. FIREWEED METALS P | TROPHY GAMES vs. East Africa Metals | TROPHY GAMES vs. SIERRA METALS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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