Correlation Between GAMING FAC and PACIFIC ONLINE
Can any of the company-specific risk be diversified away by investing in both GAMING FAC and PACIFIC ONLINE 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 PACIFIC ONLINE 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 PACIFIC ONLINE, you can compare the effects of market volatilities on GAMING FAC and PACIFIC ONLINE 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 PACIFIC ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and PACIFIC ONLINE.
Diversification Opportunities for GAMING FAC and PACIFIC ONLINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GAMING and PACIFIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and PACIFIC ONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC ONLINE 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 PACIFIC ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC ONLINE has no effect on the direction of GAMING FAC i.e., GAMING FAC and PACIFIC ONLINE go up and down completely randomly.
Pair Corralation between GAMING FAC and PACIFIC ONLINE
Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.55 times more return on investment than PACIFIC ONLINE. However, GAMING FAC is 1.55 times more volatile than PACIFIC ONLINE. It trades about 0.04 of its potential returns per unit of risk. PACIFIC ONLINE is currently generating about 0.04 per unit of risk. If you would invest 124.00 in GAMING FAC SA on August 27, 2024 and sell it today you would earn a total of 50.00 from holding GAMING FAC SA or generate 40.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
GAMING FAC SA vs. PACIFIC ONLINE
Performance |
| Timeline |
| GAMING FAC SA |
| PACIFIC ONLINE |
GAMING FAC and PACIFIC ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and PACIFIC ONLINE
The main advantage of trading using opposite GAMING FAC and PACIFIC ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC position performs unexpectedly, PACIFIC ONLINE 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 PACIFIC ONLINE will offset losses from the drop in PACIFIC ONLINE's long position.The idea behind GAMING FAC SA and PACIFIC ONLINE 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.| PACIFIC ONLINE vs. American Airlines Group | PACIFIC ONLINE vs. JD SPORTS FASH | PACIFIC ONLINE vs. PLAY2CHILL SA ZY | PACIFIC ONLINE vs. Singapore Airlines Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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