Correlation Between Pili International and Ibase Gaming
Can any of the company-specific risk be diversified away by investing in both Pili International and Ibase Gaming 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 Pili International and Ibase Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pili International Multimedia and Ibase Gaming, you can compare the effects of market volatilities on Pili International and Ibase Gaming 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 Pili International with a short position of Ibase Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pili International and Ibase Gaming.
Diversification Opportunities for Pili International and Ibase Gaming
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pili and Ibase is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pili International Multimedia and Ibase Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibase Gaming and Pili International 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 Pili International Multimedia are associated (or correlated) with Ibase Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibase Gaming has no effect on the direction of Pili International i.e., Pili International and Ibase Gaming go up and down completely randomly.
Pair Corralation between Pili International and Ibase Gaming
Assuming the 90 days trading horizon Pili International Multimedia is expected to generate 0.64 times more return on investment than Ibase Gaming. However, Pili International Multimedia is 1.57 times less risky than Ibase Gaming. It trades about -0.01 of its potential returns per unit of risk. Ibase Gaming is currently generating about -0.1 per unit of risk. If you would invest 2,375 in Pili International Multimedia on November 2, 2024 and sell it today you would lose (75.00) from holding Pili International Multimedia or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pili International Multimedia vs. Ibase Gaming
Performance |
| Timeline |
| Pili International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ibase Gaming |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pili International and Ibase Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pili International and Ibase Gaming
The main advantage of trading using opposite Pili International and Ibase Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pili International position performs unexpectedly, Ibase Gaming 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 Ibase Gaming will offset losses from the drop in Ibase Gaming's long position.The idea behind Pili International Multimedia and Ibase Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stocks Directory module to find actively traded stocks across global markets.
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