Correlation Between NEXON Co and CPU SOFTWAREHOUSE
Can any of the company-specific risk be diversified away by investing in both NEXON Co and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and CPU SOFTWAREHOUSE, you can compare the effects of market volatilities on NEXON Co and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON Co and CPU SOFTWAREHOUSE.
Diversification Opportunities for NEXON Co and CPU SOFTWAREHOUSE
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NEXON and CPU is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and CPU SOFTWAREHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPU SOFTWAREHOUSE has no effect on the direction of NEXON Co i.e., NEXON Co and CPU SOFTWAREHOUSE go up and down completely randomly.
Pair Corralation between NEXON Co and CPU SOFTWAREHOUSE
Assuming the 90 days horizon NEXON Co is expected to generate 1.63 times more return on investment than CPU SOFTWAREHOUSE. However, NEXON Co is 1.63 times more volatile than CPU SOFTWAREHOUSE. It trades about 0.06 of its potential returns per unit of risk. CPU SOFTWAREHOUSE is currently generating about -0.03 per unit of risk. If you would invest 523.00 in NEXON Co on September 4, 2024 and sell it today you would earn a total of 777.00 from holding NEXON Co or generate 148.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
NEXON Co vs. CPU SOFTWAREHOUSE
Performance |
| Timeline |
| NEXON Co |
| CPU SOFTWAREHOUSE |
NEXON Co and CPU SOFTWAREHOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON Co and CPU SOFTWAREHOUSE
The main advantage of trading using opposite NEXON Co and CPU SOFTWAREHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON Co position performs unexpectedly, CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE will offset losses from the drop in CPU SOFTWAREHOUSE's long position.| NEXON Co vs. Playa Hotels Resorts | NEXON Co vs. SEI INVESTMENTS | NEXON Co vs. Chuangs China Investments | NEXON Co vs. HK Electric Investments |
| CPU SOFTWAREHOUSE vs. Fukuyama Transporting Co | CPU SOFTWAREHOUSE vs. Transportadora de Gas | CPU SOFTWAREHOUSE vs. Gaztransport Technigaz SA | CPU SOFTWAREHOUSE vs. Liberty Broadband |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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