Correlation Between NEXON and Victory Square
Can any of the company-specific risk be diversified away by investing in both NEXON and Victory Square 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 Victory Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and Victory Square Technologies, you can compare the effects of market volatilities on NEXON and Victory Square 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 Victory Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and Victory Square.
Diversification Opportunities for NEXON and Victory Square
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXON and Victory is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and Victory Square Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Square Techn 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 Victory Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Square Techn has no effect on the direction of NEXON i.e., NEXON and Victory Square go up and down completely randomly.
Pair Corralation between NEXON and Victory Square
Assuming the 90 days horizon NEXON Co is expected to under-perform the Victory Square. But the pink sheet apears to be less risky and, when comparing its historical volatility, NEXON Co is 35.77 times less risky than Victory Square. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Victory Square Technologies is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 7.53 in Victory Square Technologies on September 13, 2024 and sell it today you would earn a total of 3.47 from holding Victory Square Technologies or generate 46.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NEXON Co vs. Victory Square Technologies
Performance |
| Timeline |
| NEXON |
| Victory Square Techn |
NEXON and Victory Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON and Victory Square
The main advantage of trading using opposite NEXON and Victory Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON position performs unexpectedly, Victory Square 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 Victory Square will offset losses from the drop in Victory Square's long position.The idea behind NEXON Co and Victory Square Technologies 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.| Victory Square vs. GameSquare Holdings | Victory Square vs. Nexon Co Ltd | Victory Square vs. i3 Interactive | Victory Square vs. IGG Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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