Correlation Between Swarmio Media and Nexon Co
Can any of the company-specific risk be diversified away by investing in both Swarmio Media 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 Swarmio Media and Nexon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swarmio Media Holdings and Nexon Co Ltd, you can compare the effects of market volatilities on Swarmio Media 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 Swarmio Media with a short position of Nexon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swarmio Media and Nexon Co.
Diversification Opportunities for Swarmio Media and Nexon Co
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swarmio and Nexon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Swarmio Media 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 Swarmio Media 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 Swarmio Media 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 Swarmio Media i.e., Swarmio Media and Nexon Co go up and down completely randomly.
Pair Corralation between Swarmio Media and Nexon Co
Assuming the 90 days horizon Swarmio Media Holdings is expected to generate 8.2 times more return on investment than Nexon Co. However, Swarmio Media is 8.2 times more volatile than Nexon Co Ltd. It trades about 0.07 of its potential returns per unit of risk. Nexon Co Ltd is currently generating about -0.02 per unit of risk. If you would invest 3.00 in Swarmio Media Holdings on August 28, 2024 and sell it today you would lose (2.33) from holding Swarmio Media Holdings or give up 77.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.84% |
| Values | Daily Returns |
Swarmio Media Holdings vs. Nexon Co Ltd
Performance |
| Timeline |
| Swarmio Media Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nexon Co |
Swarmio Media and Nexon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swarmio Media and Nexon Co
The main advantage of trading using opposite Swarmio Media and Nexon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swarmio Media 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.The idea behind Swarmio Media Holdings and Nexon Co Ltd 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.| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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