Correlation Between Aristocrat Leisure and GAMES OPERATORS
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and GAMES OPERATORS 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 Aristocrat Leisure and GAMES OPERATORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and GAMES OPERATORS SA, you can compare the effects of market volatilities on Aristocrat Leisure and GAMES OPERATORS 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 Aristocrat Leisure with a short position of GAMES OPERATORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and GAMES OPERATORS.
Diversification Opportunities for Aristocrat Leisure and GAMES OPERATORS
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aristocrat and GAMES is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and GAMES OPERATORS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMES OPERATORS SA and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with GAMES OPERATORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMES OPERATORS SA has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and GAMES OPERATORS go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and GAMES OPERATORS
Assuming the 90 days horizon Aristocrat Leisure is expected to generate 1.13 times less return on investment than GAMES OPERATORS. But when comparing it to its historical volatility, Aristocrat Leisure Limited is 2.5 times less risky than GAMES OPERATORS. It trades about 0.1 of its potential returns per unit of risk. GAMES OPERATORS SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 209.00 in GAMES OPERATORS SA on October 11, 2024 and sell it today you would earn a total of 134.00 from holding GAMES OPERATORS SA or generate 64.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. GAMES OPERATORS SA
Performance |
| Timeline |
| Aristocrat Leisure |
| GAMES OPERATORS SA |
Aristocrat Leisure and GAMES OPERATORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and GAMES OPERATORS
The main advantage of trading using opposite Aristocrat Leisure and GAMES OPERATORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, GAMES OPERATORS 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 GAMES OPERATORS will offset losses from the drop in GAMES OPERATORS's long position.| Aristocrat Leisure vs. Sea Limited | Aristocrat Leisure vs. Electronic Arts | Aristocrat Leisure vs. NEXON Co | Aristocrat Leisure vs. NEXON Co |
| GAMES OPERATORS vs. Perseus Mining Limited | GAMES OPERATORS vs. MCEWEN MINING INC | GAMES OPERATORS vs. Comba Telecom Systems | GAMES OPERATORS vs. Jacquet Metal Service |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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