Correlation Between NEXON and Blue Hat

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Can any of the company-specific risk be diversified away by investing in both NEXON and Blue Hat 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 Blue Hat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and Blue Hat Interactive, you can compare the effects of market volatilities on NEXON and Blue Hat 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 Blue Hat. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and Blue Hat.

Diversification Opportunities for NEXON and Blue Hat

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between NEXON and Blue is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and Blue Hat Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Hat Interactive 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 Blue Hat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Hat Interactive has no effect on the direction of NEXON i.e., NEXON and Blue Hat go up and down completely randomly.

Pair Corralation between NEXON and Blue Hat

Assuming the 90 days horizon NEXON Co is expected to generate 0.59 times more return on investment than Blue Hat. However, NEXON Co is 1.7 times less risky than Blue Hat. It trades about -0.21 of its potential returns per unit of risk. Blue Hat Interactive is currently generating about -0.52 per unit of risk. If you would invest  1,880  in NEXON Co on August 31, 2024 and sell it today you would lose (282.00) from holding NEXON Co or give up 15.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

NEXON Co  vs.  Blue Hat Interactive

 Performance 
       Timeline  
NEXON 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days NEXON Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Blue Hat Interactive 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blue Hat Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NEXON and Blue Hat Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NEXON and Blue Hat

The main advantage of trading using opposite NEXON and Blue Hat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON position performs unexpectedly, Blue Hat 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 Blue Hat will offset losses from the drop in Blue Hat's long position.
The idea behind NEXON Co and Blue Hat Interactive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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