Correlation Between United Internet and Gaming Realms
Can any of the company-specific risk be diversified away by investing in both United Internet and Gaming Realms 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 United Internet and Gaming Realms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and Gaming Realms plc, you can compare the effects of market volatilities on United Internet and Gaming Realms 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 United Internet with a short position of Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Gaming Realms.
Diversification Opportunities for United Internet and Gaming Realms
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Gaming is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms plc and United Internet 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 United Internet AG are associated (or correlated) with Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of United Internet i.e., United Internet and Gaming Realms go up and down completely randomly.
Pair Corralation between United Internet and Gaming Realms
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the Gaming Realms. But the stock apears to be less risky and, when comparing its historical volatility, United Internet AG is 1.15 times less risky than Gaming Realms. The stock trades about -0.09 of its potential returns per unit of risk. The Gaming Realms plc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,000 in Gaming Realms plc on September 12, 2024 and sell it today you would lose (260.00) from holding Gaming Realms plc or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Gaming Realms plc
Performance |
| Timeline |
| United Internet AG |
| Gaming Realms plc |
United Internet and Gaming Realms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Gaming Realms
The main advantage of trading using opposite United Internet and Gaming Realms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Gaming Realms 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 Gaming Realms will offset losses from the drop in Gaming Realms' long position.| United Internet vs. Samsung Electronics Co | United Internet vs. Samsung Electronics Co | United Internet vs. Hyundai Motor | United Internet vs. Reliance Industries Ltd |
| Gaming Realms vs. Rightmove PLC | Gaming Realms vs. Bioventix | Gaming Realms vs. VeriSign | Gaming Realms vs. Games Workshop Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |