Correlation Between GAMING FAC and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both GAMING FAC and FUTURE 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 GAMING FAC and FUTURE GAMING 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 FUTURE GAMING GRP, you can compare the effects of market volatilities on GAMING FAC and FUTURE 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 GAMING FAC with a short position of FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and FUTURE GAMING.
Diversification Opportunities for GAMING FAC and FUTURE GAMING
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GAMING and FUTURE is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP 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 FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of GAMING FAC i.e., GAMING FAC and FUTURE GAMING go up and down completely randomly.
Pair Corralation between GAMING FAC and FUTURE GAMING
Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.59 times more return on investment than FUTURE GAMING. However, GAMING FAC is 1.59 times more volatile than FUTURE GAMING GRP. It trades about 0.07 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about -0.01 per unit of risk. If you would invest 165.00 in GAMING FAC SA on August 29, 2024 and sell it today you would earn a total of 9.00 from holding GAMING FAC SA or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GAMING FAC SA vs. FUTURE GAMING GRP
Performance |
| Timeline |
| GAMING FAC SA |
| FUTURE GAMING GRP |
GAMING FAC and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and FUTURE GAMING
The main advantage of trading using opposite GAMING FAC and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC position performs unexpectedly, FUTURE 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.The idea behind GAMING FAC SA and FUTURE GAMING GRP 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.| FUTURE GAMING vs. Evolution AB | FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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