Correlation Between Tinybeans Group and NAVER Corp

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

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

Diversification Opportunities for Tinybeans Group and NAVER Corp

-0.49

Correlation Coefficient

Tinybeans Group  NAVER Corp

Very good diversification

The 3 months correlation between Tinybeans and NAVER is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tinybeans Group Limited and NAVER Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVER Corp and Tinybeans Group 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 Tinybeans Group Limited are associated (or correlated) with NAVER Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVER Corp has no effect on the direction of Tinybeans Group i.e., Tinybeans Group and NAVER Corp go up and down completely randomly.

Pair Corralation between Tinybeans Group and NAVER Corp

Assuming the 90 days horizon Tinybeans Group Limited is expected to under-perform the NAVER Corp. In addition to that, Tinybeans Group is 66.96 times more volatile than NAVER Corp. It trades about -0.22 of its total potential returns per unit of risk. NAVER Corp is currently generating about 0.13 per unit of volatility. If you would invest  11,423  in NAVER Corp on December 29, 2024 and sell it today you would earn a total of  77.00  from holding NAVER Corp or generate 0.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Tinybeans Group Limited  vs.  NAVER Corp

Tinybeans Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tinybeans Group Limited 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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NAVER Corp

Risk-Adjusted Performance

OK

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

Pair Trading with Tinybeans Group and NAVER Corp

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

The idea behind Tinybeans Group Limited and NAVER Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.