Correlation Between FUTURE GAMING and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on FUTURE GAMING and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and GAMESTOP.
Diversification Opportunities for FUTURE GAMING and GAMESTOP
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUTURE and GAMESTOP is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and GAMESTOP go up and down completely randomly.
Pair Corralation between FUTURE GAMING and GAMESTOP
Assuming the 90 days trading horizon FUTURE GAMING is expected to generate 2.72 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, FUTURE GAMING GRP is 2.0 times less risky than GAMESTOP. It trades about 0.06 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,311 in GAMESTOP on August 27, 2024 and sell it today you would earn a total of 1,324 from holding GAMESTOP or generate 100.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. GAMESTOP
Performance |
| Timeline |
| FUTURE GAMING GRP |
| GAMESTOP |
FUTURE GAMING and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and GAMESTOP
The main advantage of trading using opposite FUTURE GAMING and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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