Correlation Between Gaming and SBA Communications
Can any of the company-specific risk be diversified away by investing in both Gaming and SBA Communications 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 Gaming and SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and SBA Communications Corp, you can compare the effects of market volatilities on Gaming and SBA Communications 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 Gaming with a short position of SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and SBA Communications.
Diversification Opportunities for Gaming and SBA Communications
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaming and SBA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp and Gaming 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 Gaming and Leisure are associated (or correlated) with SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Gaming i.e., Gaming and SBA Communications go up and down completely randomly.
Pair Corralation between Gaming and SBA Communications
Assuming the 90 days horizon Gaming and Leisure is expected to generate 1.09 times more return on investment than SBA Communications. However, Gaming is 1.09 times more volatile than SBA Communications Corp. It trades about 0.03 of its potential returns per unit of risk. SBA Communications Corp is currently generating about -0.06 per unit of risk. If you would invest 4,628 in Gaming and Leisure on November 2, 2024 and sell it today you would earn a total of 38.00 from holding Gaming and Leisure or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming and Leisure vs. SBA Communications Corp
Performance |
| Timeline |
| Gaming and Leisure |
| SBA Communications Corp |
Gaming and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and SBA Communications
The main advantage of trading using opposite Gaming and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.| Gaming vs. H2O Retailing | Gaming vs. CyberArk Software | Gaming vs. Beta Systems Software | Gaming vs. OPERA SOFTWARE |
| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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