Correlation Between FUTURE GAMING and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and Gamma Communications 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 Gamma Communications 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 Gamma Communications plc, you can compare the effects of market volatilities on FUTURE GAMING and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and Gamma Communications.
Diversification Opportunities for FUTURE GAMING and Gamma Communications
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FUTURE and Gamma is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and Gamma Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications plc 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications plc has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and Gamma Communications go up and down completely randomly.
Pair Corralation between FUTURE GAMING and Gamma Communications
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to generate 1.57 times more return on investment than Gamma Communications. However, FUTURE GAMING is 1.57 times more volatile than Gamma Communications plc. It trades about 0.25 of its potential returns per unit of risk. Gamma Communications plc is currently generating about 0.16 per unit of risk. If you would invest 37.00 in FUTURE GAMING GRP on November 27, 2024 and sell it today you would earn a total of 5.00 from holding FUTURE GAMING GRP or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. Gamma Communications plc
Performance |
| Timeline |
| FUTURE GAMING GRP |
| Gamma Communications plc |
FUTURE GAMING and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and Gamma Communications
The main advantage of trading using opposite FUTURE GAMING and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| FUTURE GAMING vs. Norwegian Air Shuttle | FUTURE GAMING vs. Ryanair Holdings plc | FUTURE GAMING vs. Alaska Air Group | FUTURE GAMING vs. Air New Zealand |
| Gamma Communications vs. 24SEVENOFFICE GROUP AB | Gamma Communications vs. Nok Airlines PCL | Gamma Communications vs. LEONS FURNITURE | Gamma Communications vs. China Southern Airlines |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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