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
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEXON and PLAYWAY is 0.61. 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 horizon NEXON Co is expected to generate 1.22 times more return on investment than PLAYWAY SA. However, NEXON Co is 1.22 times more volatile than PLAYWAY SA ZY 10. It trades about 0.09 of its potential returns per unit of risk. PLAYWAY SA ZY 10 is currently generating about 0.07 per unit of risk. If you would invest 1,333 in NEXON Co on April 24, 2025 and sell it today you would earn a total of 187.00 from holding NEXON Co or generate 14.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NEXON Co vs. PLAYWAY SA ZY 10
Performance |
Timeline |
NEXON Co |
PLAYWAY SA ZY |
NEXON Co and PLAYWAY SA Volatility Contrast
Predicted Return Density |
Returns |
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.NEXON Co vs. Q2M Managementberatung AG | NEXON Co vs. North American Construction | NEXON Co vs. AGF Management Limited | NEXON Co vs. Platinum Investment Management |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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