Correlation Between Nexon Co and GDEV
Can any of the company-specific risk be diversified away by investing in both Nexon Co and GDEV 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 Co and GDEV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexon Co Ltd and GDEV Inc, you can compare the effects of market volatilities on Nexon Co and GDEV 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 Co with a short position of GDEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexon Co and GDEV.
Diversification Opportunities for Nexon Co and GDEV
Good diversification
The 3 months correlation between Nexon and GDEV is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nexon Co Ltd and GDEV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDEV Inc and Nexon Co 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 Ltd are associated (or correlated) with GDEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDEV Inc has no effect on the direction of Nexon Co i.e., Nexon Co and GDEV go up and down completely randomly.
Pair Corralation between Nexon Co and GDEV
Assuming the 90 days horizon Nexon Co Ltd is expected to generate 0.6 times more return on investment than GDEV. However, Nexon Co Ltd is 1.66 times less risky than GDEV. It trades about -0.24 of its potential returns per unit of risk. GDEV Inc is currently generating about -0.33 per unit of risk. If you would invest 1,731 in Nexon Co Ltd on August 28, 2024 and sell it today you would lose (318.00) from holding Nexon Co Ltd or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexon Co Ltd vs. GDEV Inc
Performance |
| Timeline |
| Nexon Co |
| GDEV Inc |
Nexon Co and GDEV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexon Co and GDEV
The main advantage of trading using opposite Nexon Co and GDEV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexon Co position performs unexpectedly, GDEV 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 GDEV will offset losses from the drop in GDEV's long position.| Nexon Co vs. GDEV Inc | Nexon Co vs. Doubledown Interactive Co | Nexon Co vs. Playstudios | Nexon Co vs. SohuCom |
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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