Correlation Between Netmarble Games and TSI

Can any of the company-specific risk be diversified away by investing in both Netmarble Games and TSI 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 TSI 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 TSI Co, you can compare the effects of market volatilities on Netmarble Games and TSI 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 TSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmarble Games and TSI.

Diversification Opportunities for Netmarble Games and TSI

0.33

Correlation Coefficient

Netmarble Games  TSI

Weak diversification

The 3 months correlation between Netmarble and TSI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Netmarble Games Corp and TSI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSI Co 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 TSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSI Co has no effect on the direction of Netmarble Games i.e., Netmarble Games and TSI go up and down completely randomly.

Pair Corralation between Netmarble Games and TSI

Assuming the 90 days trading horizon Netmarble Games Corp is expected to under-perform the TSI. But the stock apears to be less risky and, when comparing its historical volatility, Netmarble Games Corp is 1.15 times less risky than TSI. The stock trades about -0.13 of its potential returns per unit of risk. The TSI Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  603,000  in TSI Co on October 25, 2024 and sell it today you would lose (80,000) from holding TSI Co or give up 13.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Netmarble Games Corp  vs.  TSI Co

Netmarble Games Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Netmarble Games Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TSI Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Netmarble Games and TSI

The main advantage of trading using opposite Netmarble Games and TSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmarble Games position performs unexpectedly, TSI 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 TSI will offset losses from the drop in TSI's long position.

The idea behind Netmarble Games Corp and TSI Co 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.