Correlation Between Corsair Gaming and ELECOM CO

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Can any of the company-specific risk be diversified away by investing in both Corsair Gaming and ELECOM CO 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 Corsair Gaming and ELECOM CO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corsair Gaming and ELECOM LTD, you can compare the effects of market volatilities on Corsair Gaming and ELECOM CO 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 Corsair Gaming with a short position of ELECOM CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsair Gaming and ELECOM CO.

Diversification Opportunities for Corsair Gaming and ELECOM CO

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Corsair and ELECOM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and ELECOM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECOM LTD and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with ELECOM CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECOM LTD has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and ELECOM CO go up and down completely randomly.

Pair Corralation between Corsair Gaming and ELECOM CO

Assuming the 90 days horizon Corsair Gaming is expected to under-perform the ELECOM CO. In addition to that, Corsair Gaming is 1.96 times more volatile than ELECOM LTD. It trades about -0.04 of its total potential returns per unit of risk. ELECOM LTD is currently generating about -0.05 per unit of volatility. If you would invest  1,140  in ELECOM LTD on September 12, 2024 and sell it today you would lose (260.00) from holding ELECOM LTD or give up 22.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Corsair Gaming  vs.  ELECOM LTD

 Performance 
       Timeline  
Corsair Gaming 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.
ELECOM LTD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days ELECOM LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ELECOM CO is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Corsair Gaming and ELECOM CO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Corsair Gaming and ELECOM CO

The main advantage of trading using opposite Corsair Gaming and ELECOM CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corsair Gaming position performs unexpectedly, ELECOM CO 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 ELECOM CO will offset losses from the drop in ELECOM CO's long position.
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The idea behind Corsair Gaming and ELECOM LTD 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.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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