Correlation Between Nexon Co and IGG
Can any of the company-specific risk be diversified away by investing in both Nexon Co and IGG 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 IGG 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 IGG Inc, you can compare the effects of market volatilities on Nexon Co and IGG 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 IGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexon Co and IGG.
Diversification Opportunities for Nexon Co and IGG
Good diversification
The 3 months correlation between Nexon and IGG is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nexon Co Ltd and IGG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGG 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 IGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGG Inc has no effect on the direction of Nexon Co i.e., Nexon Co and IGG go up and down completely randomly.
Pair Corralation between Nexon Co and IGG
Assuming the 90 days horizon Nexon Co Ltd is expected to under-perform the IGG. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nexon Co Ltd is 2.03 times less risky than IGG. The pink sheet trades about -0.02 of its potential returns per unit of risk. The IGG Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 50.00 in IGG Inc on November 18, 2024 and sell it today you would earn a total of 6.00 from holding IGG Inc or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nexon Co Ltd vs. IGG Inc
Performance |
| Timeline |
| Nexon Co |
| IGG Inc |
Nexon Co and IGG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexon Co and IGG
The main advantage of trading using opposite Nexon Co and IGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexon Co position performs unexpectedly, IGG 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 IGG will offset losses from the drop in IGG's long position.| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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