Correlation Between FUTURE GAMING and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and GAMING FAC 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 GAMING FAC 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 GAMING FAC SA, you can compare the effects of market volatilities on FUTURE GAMING and GAMING FAC 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 GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and GAMING FAC.
Diversification Opportunities for FUTURE GAMING and GAMING FAC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUTURE and GAMING is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA 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 GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and GAMING FAC go up and down completely randomly.
Pair Corralation between FUTURE GAMING and GAMING FAC
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to under-perform the GAMING FAC. But the stock apears to be less risky and, when comparing its historical volatility, FUTURE GAMING GRP is 1.59 times less risky than GAMING FAC. The stock trades about -0.01 of its potential returns per unit of risk. The GAMING FAC SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 165.00 in GAMING FAC SA on August 29, 2024 and sell it today you would earn a total of 9.00 from holding GAMING FAC SA or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. GAMING FAC SA
Performance |
| Timeline |
| FUTURE GAMING GRP |
| GAMING FAC SA |
FUTURE GAMING and GAMING FAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and GAMING FAC
The main advantage of trading using opposite FUTURE GAMING and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.| FUTURE GAMING vs. Evolution AB | FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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