Correlation Between Soft World and GAME HOURS
Can any of the company-specific risk be diversified away by investing in both Soft World and GAME HOURS 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 Soft World and GAME HOURS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soft World International and GAME HOURS, you can compare the effects of market volatilities on Soft World and GAME HOURS 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 Soft World with a short position of GAME HOURS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soft World and GAME HOURS.
Diversification Opportunities for Soft World and GAME HOURS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Soft and GAME is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Soft World International and GAME HOURS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAME HOURS and Soft World 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 Soft World International are associated (or correlated) with GAME HOURS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAME HOURS has no effect on the direction of Soft World i.e., Soft World and GAME HOURS go up and down completely randomly.
Pair Corralation between Soft World and GAME HOURS
Assuming the 90 days trading horizon Soft World International is expected to under-perform the GAME HOURS. But the stock apears to be less risky and, when comparing its historical volatility, Soft World International is 1.99 times less risky than GAME HOURS. The stock trades about -0.22 of its potential returns per unit of risk. The GAME HOURS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 715.00 in GAME HOURS on September 2, 2024 and sell it today you would lose (18.00) from holding GAME HOURS or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Soft World International vs. GAME HOURS
Performance |
| Timeline |
| Soft World International |
| GAME HOURS |
Soft World and GAME HOURS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soft World and GAME HOURS
The main advantage of trading using opposite Soft World and GAME HOURS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soft World position performs unexpectedly, GAME HOURS 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 GAME HOURS will offset losses from the drop in GAME HOURS's long position.| Soft World vs. Gamania Digital Entertainment | Soft World vs. Chinese Gamer International | Soft World vs. Softstar Entertainment | Soft World vs. International Games System |
| GAME HOURS vs. Soft World International | GAME HOURS vs. X Legend Entertainment Co | GAME HOURS vs. Userjoy Technology Co | GAME HOURS vs. Fun Yours Technology |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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