Correlation Between NEXON and MOBILE FACTORY

Can any of the company-specific risk be diversified away by investing in both NEXON and MOBILE FACTORY 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 and MOBILE FACTORY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEXON Co and MOBILE FACTORY INC, you can compare the effects of market volatilities on NEXON and MOBILE FACTORY 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 with a short position of MOBILE FACTORY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and MOBILE FACTORY.

Diversification Opportunities for NEXON and MOBILE FACTORY

-0.72

Correlation Coefficient

NEXON  MOBILE FACTORY

Pay attention - limited upside

The 3 months correlation between NEXON and MOBILE is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and MOBILE FACTORY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOBILE FACTORY INC and NEXON 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 are associated (or correlated) with MOBILE FACTORY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOBILE FACTORY INC has no effect on the direction of NEXON i.e., NEXON and MOBILE FACTORY go up and down completely randomly.

Pair Corralation between NEXON and MOBILE FACTORY

If you would invest  535.00  in MOBILE FACTORY INC on October 6, 2024 and sell it today you would earn a total of  40.00  from holding MOBILE FACTORY INC or generate 7.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

NEXON Co  vs.  MOBILE FACTORY INC

NEXON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEXON Co 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 nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MOBILE FACTORY INC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MOBILE FACTORY INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MOBILE FACTORY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NEXON and MOBILE FACTORY

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

The idea behind NEXON Co and MOBILE FACTORY INC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.