Correlation Between GAMING FAC and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both GAMING FAC and PLAYMATES TOYS 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 GAMING FAC and PLAYMATES TOYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and PLAYMATES TOYS, you can compare the effects of market volatilities on GAMING FAC and PLAYMATES TOYS 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 GAMING FAC with a short position of PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and PLAYMATES TOYS.
Diversification Opportunities for GAMING FAC and PLAYMATES TOYS
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMING and PLAYMATES is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of GAMING FAC i.e., GAMING FAC and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between GAMING FAC and PLAYMATES TOYS
Assuming the 90 days horizon GAMING FAC SA is expected to generate 0.41 times more return on investment than PLAYMATES TOYS. However, GAMING FAC SA is 2.43 times less risky than PLAYMATES TOYS. It trades about 0.3 of its potential returns per unit of risk. PLAYMATES TOYS is currently generating about -0.05 per unit of risk. If you would invest 154.00 in GAMING FAC SA on October 25, 2024 and sell it today you would earn a total of 22.00 from holding GAMING FAC SA or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. PLAYMATES TOYS
Performance |
| Timeline |
| GAMING FAC SA |
| PLAYMATES TOYS |
GAMING FAC and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and PLAYMATES TOYS
The main advantage of trading using opposite GAMING FAC and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| GAMING FAC vs. RYANAIR HLDGS ADR | GAMING FAC vs. Scottish Mortgage Investment | GAMING FAC vs. HK Electric Investments | GAMING FAC vs. Fair Isaac Corp |
| PLAYMATES TOYS vs. Iridium Communications | PLAYMATES TOYS vs. Spirent Communications plc | PLAYMATES TOYS vs. Cairo Communication SpA | PLAYMATES TOYS vs. CITIC Telecom International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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