Correlation Between NEXON and CI GAMES
Can any of the company-specific risk be diversified away by investing in both NEXON and CI 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 and CI 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 CI GAMES SA, you can compare the effects of market volatilities on NEXON and CI 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 with a short position of CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and CI GAMES.
Diversification Opportunities for NEXON and CI GAMES
Very weak diversification
The 3 months correlation between NEXON and CI7 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA 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 CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of NEXON i.e., NEXON and CI GAMES go up and down completely randomly.
Pair Corralation between NEXON and CI GAMES
Assuming the 90 days trading horizon NEXON Co is expected to generate 0.94 times more return on investment than CI GAMES. However, NEXON Co is 1.06 times less risky than CI GAMES. It trades about -0.05 of its potential returns per unit of risk. CI GAMES SA is currently generating about -0.11 per unit of risk. If you would invest 1,440 in NEXON Co on September 13, 2024 and sell it today you would lose (70.00) from holding NEXON Co or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NEXON Co vs. CI GAMES SA
Performance |
| Timeline |
| NEXON |
| CI GAMES SA |
NEXON and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON and CI GAMES
The main advantage of trading using opposite NEXON and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON position performs unexpectedly, CI 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 CI GAMES will offset losses from the drop in CI GAMES's long position.| NEXON vs. FORMPIPE SOFTWARE AB | NEXON vs. EPSILON HEALTHCARE LTD | NEXON vs. UPDATE SOFTWARE | NEXON vs. Guidewire Software |
| CI GAMES vs. NEXON Co | CI GAMES vs. Take Two Interactive Software | CI GAMES vs. Superior Plus Corp | CI GAMES vs. SIVERS SEMICONDUCTORS AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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