Correlation Between GameSparcs and Thye Ming
Can any of the company-specific risk be diversified away by investing in both GameSparcs and Thye Ming 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 GameSparcs and Thye Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameSparcs Co and Thye Ming Industrial, you can compare the effects of market volatilities on GameSparcs and Thye Ming 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 GameSparcs with a short position of Thye Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameSparcs and Thye Ming.
Diversification Opportunities for GameSparcs and Thye Ming
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GameSparcs and Thye is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GameSparcs Co and Thye Ming Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thye Ming Industrial and GameSparcs 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 GameSparcs Co are associated (or correlated) with Thye Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thye Ming Industrial has no effect on the direction of GameSparcs i.e., GameSparcs and Thye Ming go up and down completely randomly.
Pair Corralation between GameSparcs and Thye Ming
Assuming the 90 days trading horizon GameSparcs Co is expected to generate 4.54 times more return on investment than Thye Ming. However, GameSparcs is 4.54 times more volatile than Thye Ming Industrial. It trades about 0.01 of its potential returns per unit of risk. Thye Ming Industrial is currently generating about -0.08 per unit of risk. If you would invest 5,850 in GameSparcs Co on November 7, 2024 and sell it today you would lose (50.00) from holding GameSparcs Co or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameSparcs Co vs. Thye Ming Industrial
Performance |
| Timeline |
| GameSparcs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Thye Ming Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GameSparcs and Thye Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameSparcs and Thye Ming
The main advantage of trading using opposite GameSparcs and Thye Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameSparcs position performs unexpectedly, Thye Ming 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 Thye Ming will offset losses from the drop in Thye Ming's long position.The idea behind GameSparcs Co and Thye Ming Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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