Correlation Between GAME HOURS and Ibase Gaming
Can any of the company-specific risk be diversified away by investing in both GAME HOURS and Ibase Gaming 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 GAME HOURS and Ibase Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAME HOURS and Ibase Gaming, you can compare the effects of market volatilities on GAME HOURS and Ibase Gaming 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 GAME HOURS with a short position of Ibase Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAME HOURS and Ibase Gaming.
Diversification Opportunities for GAME HOURS and Ibase Gaming
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GAME and Ibase is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GAME HOURS and Ibase Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibase Gaming and GAME HOURS 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 GAME HOURS are associated (or correlated) with Ibase Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibase Gaming has no effect on the direction of GAME HOURS i.e., GAME HOURS and Ibase Gaming go up and down completely randomly.
Pair Corralation between GAME HOURS and Ibase Gaming
Assuming the 90 days trading horizon GAME HOURS is expected to generate 37.62 times more return on investment than Ibase Gaming. However, GAME HOURS is 37.62 times more volatile than Ibase Gaming. It trades about 0.08 of its potential returns per unit of risk. Ibase Gaming is currently generating about -0.04 per unit of risk. If you would invest 5,200 in GAME HOURS on November 28, 2024 and sell it today you would lose (4,110) from holding GAME HOURS or give up 79.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAME HOURS vs. Ibase Gaming
Performance |
| Timeline |
| GAME HOURS |
| Ibase Gaming |
GAME HOURS and Ibase Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAME HOURS and Ibase Gaming
The main advantage of trading using opposite GAME HOURS and Ibase Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAME HOURS position performs unexpectedly, Ibase Gaming 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 Ibase Gaming will offset losses from the drop in Ibase Gaming's long position.| GAME HOURS vs. International Games System | GAME HOURS vs. Gamania Digital Entertainment | GAME HOURS vs. Soft World International | GAME HOURS vs. Softstar Entertainment |
| Ibase Gaming vs. Emerging Display Technologies | Ibase Gaming vs. Lanner Electronics | Ibase Gaming vs. King Chou Marine | Ibase Gaming vs. Information Technology Total |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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