Correlation Between Baked Games and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both Baked Games and Gaming Factory 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 Gaming Factory 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 Gaming Factory SA, you can compare the effects of market volatilities on Baked Games and Gaming Factory 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 Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baked Games and Gaming Factory.
Diversification Opportunities for Baked Games and Gaming Factory
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baked and Gaming is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baked Games SA and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory SA 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 Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of Baked Games i.e., Baked Games and Gaming Factory go up and down completely randomly.
Pair Corralation between Baked Games and Gaming Factory
Assuming the 90 days trading horizon Baked Games SA is expected to under-perform the Gaming Factory. But the stock apears to be less risky and, when comparing its historical volatility, Baked Games SA is 1.07 times less risky than Gaming Factory. The stock trades about -0.05 of its potential returns per unit of risk. The Gaming Factory SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 584.00 in Gaming Factory SA on August 30, 2024 and sell it today you would earn a total of 134.00 from holding Gaming Factory SA or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.18% |
| Values | Daily Returns |
Baked Games SA vs. Gaming Factory SA
Performance |
| Timeline |
| Baked Games SA |
| Gaming Factory SA |
Baked Games and Gaming Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baked Games and Gaming Factory
The main advantage of trading using opposite Baked Games and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baked Games position performs unexpectedly, Gaming Factory 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 Gaming Factory will offset losses from the drop in Gaming Factory's long position.| Baked Games vs. Banco Santander SA | Baked Games vs. UniCredit SpA | Baked Games vs. CEZ as | Baked Games vs. Polski Koncern Naftowy |
| Gaming Factory vs. Intersport Polska SA | Gaming Factory vs. Carlson Investments SA | Gaming Factory vs. Drago entertainment SA | Gaming Factory vs. Mlk Foods Public |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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