Correlation Between FUTURE GAMING and Pan American
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and Pan American 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 Pan American 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 Pan American Silver, you can compare the effects of market volatilities on FUTURE GAMING and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and Pan American.
Diversification Opportunities for FUTURE GAMING and Pan American
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FUTURE and Pan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and Pan American go up and down completely randomly.
Pair Corralation between FUTURE GAMING and Pan American
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to generate 2.36 times more return on investment than Pan American. However, FUTURE GAMING is 2.36 times more volatile than Pan American Silver. It trades about 0.02 of its potential returns per unit of risk. Pan American Silver is currently generating about 0.03 per unit of risk. If you would invest 59.00 in FUTURE GAMING GRP on October 11, 2024 and sell it today you would lose (10.00) from holding FUTURE GAMING GRP or give up 16.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. Pan American Silver
Performance |
| Timeline |
| FUTURE GAMING GRP |
| Pan American Silver |
FUTURE GAMING and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and Pan American
The main advantage of trading using opposite FUTURE GAMING and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. NMI Holdings |
| Pan American vs. United Rentals | Pan American vs. Boyd Gaming | Pan American vs. UNITED RENTALS | Pan American vs. FUTURE GAMING GRP |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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