Correlation Between Mixi and Nexon Co

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

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

Diversification Opportunities for Mixi and Nexon Co

0.79

Correlation Coefficient

Mixi  Nexon Co

Poor diversification

The 3 months correlation between Mixi and Nexon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mixi Inc and Nexon Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexon Co 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 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 Mixi i.e., Mixi and Nexon Co go up and down completely randomly.

Pair Corralation between Mixi and Nexon Co

If you would invest  1,692  in Mixi Inc on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Mixi Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	29.69%
Values	Daily Returns

Mixi Inc  vs.  Nexon Co Ltd

Mixi Inc

Risk-Adjusted Performance

0 of 100

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.

Nexon Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexon Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mixi and Nexon Co

The main advantage of trading using opposite Mixi and Nexon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mixi 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 Mixi Inc and Nexon Co Ltd 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.