Correlation Between Konami Holdings and Nexon Co
Can any of the company-specific risk be diversified away by investing in both Konami Holdings and Nexon Co 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 Konami Holdings and Nexon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konami Holdings and Nexon Co Ltd, you can compare the effects of market volatilities on Konami Holdings and Nexon Co 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 Konami Holdings with a short position of Nexon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konami Holdings and Nexon Co.
Diversification Opportunities for Konami Holdings and Nexon Co
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Konami and Nexon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Konami Holdings and Nexon Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexon Co and Konami Holdings 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 Konami Holdings are associated (or correlated) with Nexon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexon Co has no effect on the direction of Konami Holdings i.e., Konami Holdings and Nexon Co go up and down completely randomly.
Pair Corralation between Konami Holdings and Nexon Co
Assuming the 90 days horizon Konami Holdings is expected to generate 0.66 times more return on investment than Nexon Co. However, Konami Holdings is 1.51 times less risky than Nexon Co. It trades about 0.19 of its potential returns per unit of risk. Nexon Co Ltd is currently generating about -0.31 per unit of risk. If you would invest 4,316 in Konami Holdings on August 31, 2024 and sell it today you would earn a total of 402.00 from holding Konami Holdings or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konami Holdings vs. Nexon Co Ltd
Performance |
| Timeline |
| Konami Holdings |
| Nexon Co |
Konami Holdings and Nexon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konami Holdings and Nexon Co
The main advantage of trading using opposite Konami Holdings and Nexon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konami Holdings position performs unexpectedly, Nexon Co 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 Co will offset losses from the drop in Nexon Co's long position.| Konami Holdings vs. NEXON Co | Konami Holdings vs. Sega Sammy Holdings | Konami Holdings vs. Capcom Co Ltd | Konami Holdings vs. CD Projekt SA |
| Nexon Co vs. i3 Interactive | Nexon Co vs. Sega Sammy Holdings | Nexon Co vs. Square Enix Holdings | Nexon Co vs. Nintendo Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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