Correlation Between CarsalesCom and NEXON
Can any of the company-specific risk be diversified away by investing in both CarsalesCom and NEXON 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 CarsalesCom and NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and NEXON Co, you can compare the effects of market volatilities on CarsalesCom and NEXON 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 CarsalesCom with a short position of NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and NEXON.
Diversification Opportunities for CarsalesCom and NEXON
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CarsalesCom and NEXON is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON and CarsalesCom 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 CarsalesCom are associated (or correlated) with NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of CarsalesCom i.e., CarsalesCom and NEXON go up and down completely randomly.
Pair Corralation between CarsalesCom and NEXON
Assuming the 90 days horizon CarsalesCom is expected to generate 0.31 times more return on investment than NEXON. However, CarsalesCom is 3.24 times less risky than NEXON. It trades about 0.06 of its potential returns per unit of risk. NEXON Co is currently generating about -0.15 per unit of risk. If you would invest 2,400 in CarsalesCom on September 12, 2024 and sell it today you would earn a total of 40.00 from holding CarsalesCom or generate 1.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CarsalesCom vs. NEXON Co
Performance |
Timeline |
CarsalesCom |
NEXON |
CarsalesCom and NEXON Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CarsalesCom and NEXON
The main advantage of trading using opposite CarsalesCom and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom position performs unexpectedly, NEXON 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 will offset losses from the drop in NEXON's long position.CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
NEXON vs. PACIFIC ONLINE | NEXON vs. Pembina Pipeline Corp | NEXON vs. PRECISION DRILLING P | NEXON vs. CarsalesCom |
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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