Correlation Between Golden Matrix and NEXON Co

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

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

Diversification Opportunities for Golden Matrix and NEXON Co

-0.24

Correlation Coefficient

Golden Matrix  NEXON Co

Very good diversification

The 3 months correlation between Golden and NEXON is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON Co and Golden Matrix 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 Golden Matrix Group 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 Golden Matrix i.e., Golden Matrix and NEXON Co go up and down completely randomly.

Pair Corralation between Golden Matrix and NEXON Co

Given the investment horizon of 90 days Golden Matrix Group is expected to generate 2.7 times more return on investment than NEXON Co. However, Golden Matrix 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 -0.11 per unit of risk. If you would invest  234.00  in Golden Matrix Group on September 4, 2024 and sell it today you would lose (1.00) from holding Golden Matrix Group or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Golden Matrix Group  vs.  NEXON Co

Golden Matrix Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Matrix Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Golden Matrix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NEXON Co

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Golden Matrix and NEXON Co

The main advantage of trading using opposite Golden Matrix and NEXON Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Matrix 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.

The idea behind Golden Matrix Group and NEXON 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.