Correlation Between FUTURE GAMING and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING 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 FUTURE GAMING and TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUTURE GAMING GRP and TROPHY GAMES DEV, you can compare the effects of market volatilities on FUTURE GAMING 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 FUTURE GAMING with a short position of TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and TROPHY GAMES.
Diversification Opportunities for FUTURE GAMING and TROPHY GAMES
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUTURE and TROPHY is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP 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 FUTURE 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 FUTURE GAMING GRP 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 FUTURE GAMING i.e., FUTURE GAMING and TROPHY GAMES go up and down completely randomly.
Pair Corralation between FUTURE GAMING and TROPHY GAMES
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to under-perform the TROPHY GAMES. But the stock apears to be less risky and, when comparing its historical volatility, FUTURE GAMING GRP is 1.0 times less risky than TROPHY GAMES. The stock trades about -0.18 of its potential returns per unit of risk. The TROPHY GAMES DEV is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 97.00 in TROPHY GAMES DEV on August 24, 2024 and sell it today you would lose (3.00) from holding TROPHY GAMES DEV or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. TROPHY GAMES DEV
Performance |
| Timeline |
| FUTURE GAMING GRP |
| TROPHY GAMES DEV |
FUTURE GAMING and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and TROPHY GAMES
The main advantage of trading using opposite FUTURE GAMING and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING 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.| FUTURE GAMING vs. Aegean Airlines SA | FUTURE GAMING vs. Dalata Hotel Group | FUTURE GAMING vs. JAPAN AIRLINES | FUTURE GAMING vs. DALATA HOTEL |
| TROPHY GAMES vs. Sea Limited | TROPHY GAMES vs. NEXON Co | TROPHY GAMES vs. Take Two Interactive Software | TROPHY GAMES vs. Bilibili |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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