Correlation Between Baked Games and Carlson Investments
Can any of the company-specific risk be diversified away by investing in both Baked Games and Carlson Investments 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 Baked Games and Carlson Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baked Games SA and Carlson Investments SA, you can compare the effects of market volatilities on Baked Games and Carlson Investments 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 Baked Games with a short position of Carlson Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baked Games and Carlson Investments.
Diversification Opportunities for Baked Games and Carlson Investments
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baked and Carlson is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Baked Games SA and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and Baked Games 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 Baked Games SA are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Baked Games i.e., Baked Games and Carlson Investments go up and down completely randomly.
Pair Corralation between Baked Games and Carlson Investments
Assuming the 90 days trading horizon Baked Games SA is expected to generate 0.64 times more return on investment than Carlson Investments. However, Baked Games SA is 1.57 times less risky than Carlson Investments. It trades about -0.05 of its potential returns per unit of risk. Carlson Investments SA is currently generating about -0.07 per unit of risk. If you would invest 790.00 in Baked Games SA on August 31, 2024 and sell it today you would lose (478.00) from holding Baked Games SA or give up 60.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.11% |
| Values | Daily Returns |
Baked Games SA vs. Carlson Investments SA
Performance |
| Timeline |
| Baked Games SA |
| Carlson Investments |
Baked Games and Carlson Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baked Games and Carlson Investments
The main advantage of trading using opposite Baked Games and Carlson Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baked Games position performs unexpectedly, Carlson Investments 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 Carlson Investments will offset losses from the drop in Carlson Investments' long position.| Baked Games vs. Banco Santander SA | Baked Games vs. UniCredit SpA | Baked Games vs. CEZ as | Baked Games vs. Polski Koncern Naftowy |
| Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Detalion Games SA | Carlson Investments vs. Asseco South Eastern | Carlson Investments vs. CFI Holding SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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