Correlation Between VARIOUS EATERIES and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and TROPHY GAMES 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 VARIOUS EATERIES and TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and TROPHY GAMES DEV, you can compare the effects of market volatilities on VARIOUS EATERIES and TROPHY GAMES 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 VARIOUS EATERIES with a short position of TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and TROPHY GAMES.
Diversification Opportunities for VARIOUS EATERIES and TROPHY GAMES
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between VARIOUS and TROPHY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and TROPHY GAMES go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and TROPHY GAMES
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to generate 0.6 times more return on investment than TROPHY GAMES. However, VARIOUS EATERIES LS is 1.65 times less risky than TROPHY GAMES. It trades about 0.01 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about -0.21 per unit of risk. If you would invest 21.00 in VARIOUS EATERIES LS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding VARIOUS EATERIES LS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. TROPHY GAMES DEV
Performance |
| Timeline |
| VARIOUS EATERIES |
| TROPHY GAMES DEV |
VARIOUS EATERIES and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and TROPHY GAMES
The main advantage of trading using opposite VARIOUS EATERIES and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| VARIOUS EATERIES vs. STRAYER EDUCATION | VARIOUS EATERIES vs. GAMING FAC SA | VARIOUS EATERIES vs. GigaMedia | VARIOUS EATERIES vs. TAL Education Group |
| TROPHY GAMES vs. Sea Limited | TROPHY GAMES vs. Take Two Interactive Software | TROPHY GAMES vs. Superior Plus Corp | TROPHY GAMES vs. NMI Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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