Correlation Between Mixi and Gravity

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

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

Diversification Opportunities for Mixi and Gravity

0.0

Correlation Coefficient

Mixi  Gravity

Pay attention - limited upside

The 3 months correlation between Mixi and Gravity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mixi Inc and Gravity Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gravity and Mixi 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 Mixi Inc are associated (or correlated) with Gravity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gravity has no effect on the direction of Mixi i.e., Mixi and Gravity go up and down completely randomly.

Pair Corralation between Mixi and Gravity

If you would invest  5,800  in Gravity Co on December 28, 2024 and sell it today you would earn a total of  255.00  from holding Gravity Co or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mixi Inc  vs.  Gravity Co

Mixi Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mixi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Mixi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gravity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gravity Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gravity is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mixi and Gravity

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

The idea behind Mixi Inc and Gravity 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.