Correlation Between NEXON and GungHo Online
Can any of the company-specific risk be diversified away by investing in both NEXON and GungHo Online 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 GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and GungHo Online Entertainment, you can compare the effects of market volatilities on NEXON and GungHo Online 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 GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and GungHo Online.
Diversification Opportunities for NEXON and GungHo Online
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEXON and GungHo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert 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 GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of NEXON i.e., NEXON and GungHo Online go up and down completely randomly.
Pair Corralation between NEXON and GungHo Online
Assuming the 90 days trading horizon NEXON Co is expected to under-perform the GungHo Online. In addition to that, NEXON is 1.15 times more volatile than GungHo Online Entertainment. It trades about -0.24 of its total potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.04 per unit of volatility. If you would invest 1,890 in GungHo Online Entertainment on August 29, 2024 and sell it today you would lose (100.00) from holding GungHo Online Entertainment or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
NEXON Co vs. GungHo Online Entertainment
Performance |
| Timeline |
| NEXON |
| GungHo Online Entert |
NEXON and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON and GungHo Online
The main advantage of trading using opposite NEXON and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online's long position.| NEXON vs. STORE ELECTRONIC | NEXON vs. METHODE ELECTRONICS | NEXON vs. UET United Electronic | NEXON vs. Nucletron Electronic Aktiengesellschaft |
| GungHo Online vs. Sea Limited | GungHo Online vs. Superior Plus Corp | GungHo Online vs. NMI Holdings | GungHo Online 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |