Correlation Between Power Wind and Ibase Gaming
Can any of the company-specific risk be diversified away by investing in both Power Wind 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 Power Wind and Ibase Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Wind Health and Ibase Gaming, you can compare the effects of market volatilities on Power Wind 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 Power Wind with a short position of Ibase Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and Ibase Gaming.
Diversification Opportunities for Power Wind and Ibase Gaming
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Power and Ibase is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health and Ibase Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibase Gaming and Power Wind 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 Power Wind Health 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 Power Wind i.e., Power Wind and Ibase Gaming go up and down completely randomly.
Pair Corralation between Power Wind and Ibase Gaming
Assuming the 90 days trading horizon Power Wind Health is expected to under-perform the Ibase Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Power Wind Health is 1.72 times less risky than Ibase Gaming. The stock trades about -0.01 of its potential returns per unit of risk. The Ibase Gaming is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,895 in Ibase Gaming on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Ibase Gaming or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Wind Health vs. Ibase Gaming
Performance |
| Timeline |
| Power Wind Health |
| Ibase Gaming |
Power Wind and Ibase Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Wind and Ibase Gaming
The main advantage of trading using opposite Power Wind and Ibase Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Wind 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.| Power Wind vs. Sunny Friend Environmental | Power Wind vs. Cleanaway Co | Power Wind vs. Charoen Pokphand Enterprise | Power Wind vs. TTET Union Corp |
| Ibase Gaming vs. Power Wind Health | Ibase Gaming vs. Pacific Hospital Supply | Ibase Gaming vs. Asmedia Technology | Ibase Gaming vs. U Media Communications |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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