Correlation Between FUTURE GAMING and Sto SE
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and Sto SE 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 Sto SE 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 Sto SE Co, you can compare the effects of market volatilities on FUTURE GAMING and Sto SE 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 Sto SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and Sto SE.
Diversification Opportunities for FUTURE GAMING and Sto SE
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FUTURE and Sto is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and Sto SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sto SE 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 Sto SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sto SE has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and Sto SE go up and down completely randomly.
Pair Corralation between FUTURE GAMING and Sto SE
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to under-perform the Sto SE. In addition to that, FUTURE GAMING is 2.35 times more volatile than Sto SE Co. It trades about -0.06 of its total potential returns per unit of risk. Sto SE Co is currently generating about -0.11 per unit of volatility. If you would invest 11,560 in Sto SE Co on September 12, 2024 and sell it today you would lose (1,240) from holding Sto SE Co or give up 10.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.31% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. Sto SE Co
Performance |
| Timeline |
| FUTURE GAMING GRP |
| Sto SE |
FUTURE GAMING and Sto SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and Sto SE
The main advantage of trading using opposite FUTURE GAMING and Sto SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, Sto SE 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 Sto SE will offset losses from the drop in Sto SE's long position.| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. SIVERS SEMICONDUCTORS AB |
| Sto SE vs. Ebro Foods SA | Sto SE vs. GOLD ROAD RES | Sto SE vs. Texas Roadhouse | Sto SE vs. Gold Road Resources |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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