Correlation Between MOVIE GAMES and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and KOWORLD AG 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 KOWORLD AG 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 KOWORLD AG, you can compare the effects of market volatilities on MOVIE GAMES and KOWORLD AG 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 KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and KOWORLD AG.
Diversification Opportunities for MOVIE GAMES and KOWORLD AG
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MOVIE and KOWORLD is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and KOWORLD AG go up and down completely randomly.
Pair Corralation between MOVIE GAMES and KOWORLD AG
Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 3.17 times more return on investment than KOWORLD AG. However, MOVIE GAMES is 3.17 times more volatile than KOWORLD AG. It trades about 0.2 of its potential returns per unit of risk. KOWORLD AG is currently generating about -0.04 per unit of risk. If you would invest 351.00 in MOVIE GAMES SA on November 5, 2024 and sell it today you would earn a total of 63.00 from holding MOVIE GAMES SA or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. KOWORLD AG
Performance |
| Timeline |
| MOVIE GAMES SA |
| KOWORLD AG |
MOVIE GAMES and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and KOWORLD AG
The main advantage of trading using opposite MOVIE GAMES and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG's long position.| MOVIE GAMES vs. PARKEN Sport Entertainment | MOVIE GAMES vs. CENTURIA OFFICE REIT | MOVIE GAMES vs. SIEM OFFSHORE NEW | MOVIE GAMES vs. GREENX METALS LTD |
| KOWORLD AG vs. TRADELINK ELECTRON | KOWORLD AG vs. National Retail Properties | KOWORLD AG vs. TRADEDOUBLER AB SK | KOWORLD AG vs. Fast Retailing Co |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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