Correlation Between NEXON Co and PLAYWAY SA

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

By analyzing existing cross correlation between NEXON Co and PLAYWAY SA ZY 10, you can compare the effects of market volatilities on NEXON Co and PLAYWAY SA 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 Co with a short position of PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON Co and PLAYWAY SA.

Diversification Opportunities for NEXON Co and PLAYWAY SA

0.56

Correlation Coefficient

NEXON Co  PLAYWAY SA

Very weak diversification

The 3 months correlation between NEXON and PLAYWAY is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and PLAYWAY SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA ZY and NEXON Co 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 PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA ZY has no effect on the direction of NEXON Co i.e., NEXON Co and PLAYWAY SA go up and down completely randomly.

Pair Corralation between NEXON Co and PLAYWAY SA

Assuming the 90 days trading horizon NEXON Co is expected to generate 13.73 times more return on investment than PLAYWAY SA. However, NEXON Co is 13.73 times more volatile than PLAYWAY SA ZY 10. It trades about 0.25 of its potential returns per unit of risk. PLAYWAY SA ZY 10 is currently generating about 0.14 per unit of risk. If you would invest  622.00  in NEXON Co on October 9, 2024 and sell it today you would earn a total of  768.00  from holding NEXON Co or generate 123.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

NEXON Co  vs.  PLAYWAY SA ZY 10

NEXON Co

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEXON Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, NEXON Co unveiled solid returns over the last few months and may actually be approaching a breakup point.

PLAYWAY SA ZY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYWAY SA ZY 10 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PLAYWAY SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NEXON Co and PLAYWAY SA

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

The idea behind NEXON Co and PLAYWAY SA ZY 10 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.