Correlation Between Strategic Investments and NEXON Co
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and NEXON Co 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 Strategic Investments and NEXON Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and NEXON Co, you can compare the effects of market volatilities on Strategic Investments and NEXON Co 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 Strategic Investments with a short position of NEXON Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and NEXON Co.
Diversification Opportunities for Strategic Investments and NEXON Co
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and NEXON is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON Co and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with NEXON Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON Co has no effect on the direction of Strategic Investments i.e., Strategic Investments and NEXON Co go up and down completely randomly.
Pair Corralation between Strategic Investments and NEXON Co
Assuming the 90 days horizon Strategic Investments AS is expected to generate 2.7 times more return on investment than NEXON Co. However, Strategic Investments is 2.7 times more volatile than NEXON Co. It trades about 0.02 of its potential returns per unit of risk. NEXON Co is currently generating about -0.04 per unit of risk. If you would invest 14.00 in Strategic Investments AS on December 29, 2024 and sell it today you would lose (1.00) from holding Strategic Investments AS or give up 7.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Strategic Investments AS vs. NEXON Co
Performance |
Timeline |
Strategic Investments |
NEXON Co |
Strategic Investments and NEXON Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Strategic Investments and NEXON Co
The main advantage of trading using opposite Strategic Investments and NEXON Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, NEXON Co 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 Co will offset losses from the drop in NEXON Co's long position.Strategic Investments vs. ULTRA CLEAN HLDGS | Strategic Investments vs. CLEAN ENERGY FUELS | Strategic Investments vs. Air New Zealand | Strategic Investments vs. AIR LIQUIDE ADR |
NEXON Co vs. United Airlines Holdings | NEXON Co vs. JAPAN AIRLINES | NEXON Co vs. American Airlines Group | NEXON Co vs. Applied Materials |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |