Correlation Between NEXON and Bilibili
Can any of the company-specific risk be diversified away by investing in both NEXON and Bilibili 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 and Bilibili into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and Bilibili, you can compare the effects of market volatilities on NEXON and Bilibili 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 with a short position of Bilibili. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and Bilibili.
Diversification Opportunities for NEXON and Bilibili
Good diversification
The 3 months correlation between NEXON and Bilibili is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili and NEXON 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of NEXON i.e., NEXON and Bilibili go up and down completely randomly.
Pair Corralation between NEXON and Bilibili
Assuming the 90 days trading horizon NEXON Co is expected to under-perform the Bilibili. But the stock apears to be less risky and, when comparing its historical volatility, NEXON Co is 2.07 times less risky than Bilibili. The stock trades about -0.16 of its potential returns per unit of risk. The Bilibili is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Bilibili on August 29, 2024 and sell it today you would earn a total of 440.00 from holding Bilibili or generate 34.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXON Co vs. Bilibili
Performance |
| Timeline |
| NEXON |
| Bilibili |
NEXON and Bilibili Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON and Bilibili
The main advantage of trading using opposite NEXON and Bilibili positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON position performs unexpectedly, Bilibili 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 Bilibili will offset losses from the drop in Bilibili's long position.| NEXON vs. STORE ELECTRONIC | NEXON vs. METHODE ELECTRONICS | NEXON vs. UET United Electronic | NEXON vs. Nucletron Electronic Aktiengesellschaft |
| Bilibili vs. CyberArk Software | Bilibili vs. ASURE SOFTWARE | Bilibili vs. OFFICE DEPOT | Bilibili vs. INTERCONT HOTELS |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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