Correlation Between GAMING FAC and NEXON
Can any of the company-specific risk be diversified away by investing in both GAMING FAC and NEXON 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 GAMING FAC and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and NEXON Co, you can compare the effects of market volatilities on GAMING FAC and NEXON 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 GAMING FAC with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and NEXON.
Diversification Opportunities for GAMING FAC and NEXON
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMING and NEXON is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of GAMING FAC i.e., GAMING FAC and NEXON go up and down completely randomly.
Pair Corralation between GAMING FAC and NEXON
Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.26 times more return on investment than NEXON. However, GAMING FAC is 1.26 times more volatile than NEXON Co. It trades about 0.18 of its potential returns per unit of risk. NEXON Co is currently generating about -0.19 per unit of risk. If you would invest 154.00 in GAMING FAC SA on October 26, 2024 and sell it today you would earn a total of 14.00 from holding GAMING FAC SA or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. NEXON Co
Performance |
| Timeline |
| GAMING FAC SA |
| NEXON |
GAMING FAC and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and NEXON
The main advantage of trading using opposite GAMING FAC and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| GAMING FAC vs. PLANT VEDA FOODS | GAMING FAC vs. Tyson Foods | GAMING FAC vs. Cal Maine Foods | GAMING FAC vs. SENECA FOODS A |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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