Correlation Between ELECOM and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both ELECOM and Corsair 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 ELECOM and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECOM LTD and Corsair Gaming, you can compare the effects of market volatilities on ELECOM and Corsair 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 ELECOM with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECOM and Corsair Gaming.
Diversification Opportunities for ELECOM and Corsair Gaming
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELECOM and Corsair is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ELECOM LTD and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and ELECOM 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 ELECOM LTD are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of ELECOM i.e., ELECOM and Corsair Gaming go up and down completely randomly.
Pair Corralation between ELECOM and Corsair Gaming
Assuming the 90 days horizon ELECOM is expected to generate 6.63 times less return on investment than Corsair Gaming. But when comparing it to its historical volatility, ELECOM LTD is 5.57 times less risky than Corsair Gaming. It trades about 0.13 of its potential returns per unit of risk. Corsair Gaming is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 585.00 in Corsair Gaming on August 29, 2024 and sell it today you would earn a total of 103.00 from holding Corsair Gaming or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELECOM LTD vs. Corsair Gaming
Performance |
| Timeline |
| ELECOM LTD |
| Corsair Gaming |
ELECOM and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECOM and Corsair Gaming
The main advantage of trading using opposite ELECOM and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECOM position performs unexpectedly, Corsair 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.| ELECOM vs. Insurance Australia Group | ELECOM vs. ZURICH INSURANCE GROUP | ELECOM vs. Zurich Insurance Group | ELECOM vs. HANOVER INSURANCE |
| Corsair Gaming vs. INSURANCE AUST GRP | Corsair Gaming vs. MINCO SILVER | Corsair Gaming vs. MAGNUM MINING EXP | Corsair Gaming vs. Selective Insurance Group |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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