Correlation Between TROPHY GAMES and United Internet
Can any of the company-specific risk be diversified away by investing in both TROPHY GAMES and United Internet 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 TROPHY GAMES and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TROPHY GAMES DEV and United Internet AG, you can compare the effects of market volatilities on TROPHY GAMES and United Internet 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 TROPHY GAMES with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of TROPHY GAMES and United Internet.
Diversification Opportunities for TROPHY GAMES and United Internet
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TROPHY and United is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TROPHY GAMES DEV and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and TROPHY 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 TROPHY GAMES DEV are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of TROPHY GAMES i.e., TROPHY GAMES and United Internet go up and down completely randomly.
Pair Corralation between TROPHY GAMES and United Internet
Assuming the 90 days horizon TROPHY GAMES DEV is expected to generate 1.92 times more return on investment than United Internet. However, TROPHY GAMES is 1.92 times more volatile than United Internet AG. It trades about 0.29 of its potential returns per unit of risk. United Internet AG is currently generating about 0.03 per unit of risk. If you would invest 81.00 in TROPHY GAMES DEV on October 22, 2024 and sell it today you would earn a total of 9.00 from holding TROPHY GAMES DEV or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
TROPHY GAMES DEV vs. United Internet AG
Performance |
| Timeline |
| TROPHY GAMES DEV |
| United Internet AG |
TROPHY GAMES and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TROPHY GAMES and United Internet
The main advantage of trading using opposite TROPHY GAMES and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TROPHY GAMES position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| TROPHY GAMES vs. Nordic Semiconductor ASA | TROPHY GAMES vs. TOREX SEMICONDUCTOR LTD | TROPHY GAMES vs. Playa Hotels Resorts | TROPHY GAMES vs. InPlay Oil Corp |
| United Internet vs. Gruppo Mutuionline SpA | United Internet vs. CODERE ONLINE LUX | United Internet vs. RYU Apparel | United Internet vs. WILLIS LEASE FIN |
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 CEOs Directory module to screen CEOs from public companies around the world.
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