Correlation Between Netmarble Games and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Netmarble Games and Eagon Industrial 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 Netmarble Games and Eagon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netmarble Games Corp and Eagon Industrial Co, you can compare the effects of market volatilities on Netmarble Games and Eagon Industrial 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 Netmarble Games with a short position of Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and Eagon Industrial.
Diversification Opportunities for Netmarble Games and Eagon Industrial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netmarble and Eagon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial and Netmarble Games 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 Netmarble Games Corp are associated (or correlated) with Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Netmarble Games i.e., Netmarble Games and Eagon Industrial go up and down completely randomly.
Pair Corralation between Netmarble Games and Eagon Industrial
Assuming the 90 days trading horizon Netmarble Games Corp is expected to generate 1.86 times more return on investment than Eagon Industrial. However, Netmarble Games is 1.86 times more volatile than Eagon Industrial Co. It trades about 0.02 of its potential returns per unit of risk. Eagon Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 5,210,000 in Netmarble Games Corp on September 26, 2024 and sell it today you would earn a total of 90,000 from holding Netmarble Games Corp or generate 1.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Netmarble Games Corp vs. Eagon Industrial Co
Performance |
Timeline |
Netmarble Games Corp |
Eagon Industrial |
Netmarble Games and Eagon Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netmarble Games and Eagon Industrial
The main advantage of trading using opposite Netmarble Games and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.Netmarble Games vs. KT Submarine Telecom | Netmarble Games vs. Lotte Data Communication | Netmarble Games vs. Alton Sports CoLtd | Netmarble Games vs. Jinro Distillers Co |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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