Correlation Between MOVIE GAMES and AJ LUCAS
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and AJ LUCAS 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 MOVIE GAMES and AJ LUCAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and AJ LUCAS GROUP, you can compare the effects of market volatilities on MOVIE GAMES and AJ LUCAS 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 MOVIE GAMES with a short position of AJ LUCAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and AJ LUCAS.
Diversification Opportunities for MOVIE GAMES and AJ LUCAS
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MOVIE and FW9 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and AJ LUCAS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ LUCAS GROUP and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with AJ LUCAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ LUCAS GROUP has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and AJ LUCAS go up and down completely randomly.
Pair Corralation between MOVIE GAMES and AJ LUCAS
Assuming the 90 days horizon MOVIE GAMES is expected to generate 11.06 times less return on investment than AJ LUCAS. But when comparing it to its historical volatility, MOVIE GAMES SA is 7.04 times less risky than AJ LUCAS. It trades about 0.15 of its potential returns per unit of risk. AJ LUCAS GROUP is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.05 in AJ LUCAS GROUP on October 25, 2024 and sell it today you would earn a total of 0.05 from holding AJ LUCAS GROUP or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
MOVIE GAMES SA vs. AJ LUCAS GROUP
Performance |
| Timeline |
| MOVIE GAMES SA |
| AJ LUCAS GROUP |
MOVIE GAMES and AJ LUCAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and AJ LUCAS
The main advantage of trading using opposite MOVIE GAMES and AJ LUCAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, AJ LUCAS 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 AJ LUCAS will offset losses from the drop in AJ LUCAS's long position.| MOVIE GAMES vs. AXWAY SOFTWARE EO | MOVIE GAMES vs. LG Display Co | MOVIE GAMES vs. Check Point Software | MOVIE GAMES vs. PLAYTIKA HOLDING DL 01 |
| AJ LUCAS vs. High Liner Foods | AJ LUCAS vs. AIR PRODCHEMICALS | AJ LUCAS vs. Molson Coors Beverage | AJ LUCAS vs. Citic Telecom International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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