Correlation Between Carlson Investments and VR Factory
Can any of the company-specific risk be diversified away by investing in both Carlson Investments and VR 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 Carlson Investments and VR Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlson Investments SA and VR Factory Games, you can compare the effects of market volatilities on Carlson Investments and VR 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 Carlson Investments with a short position of VR Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and VR Factory.
Diversification Opportunities for Carlson Investments and VR Factory
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlson and VRF is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and VR Factory Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Factory Games and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with VR Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Factory Games has no effect on the direction of Carlson Investments i.e., Carlson Investments and VR Factory go up and down completely randomly.
Pair Corralation between Carlson Investments and VR Factory
Assuming the 90 days trading horizon Carlson Investments SA is expected to under-perform the VR Factory. But the stock apears to be less risky and, when comparing its historical volatility, Carlson Investments SA is 1.14 times less risky than VR Factory. The stock trades about -0.01 of its potential returns per unit of risk. The VR Factory Games is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 36.00 in VR Factory Games on September 3, 2024 and sell it today you would lose (4.00) from holding VR Factory Games or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Carlson Investments SA vs. VR Factory Games
Performance |
| Timeline |
| Carlson Investments |
| VR Factory Games |
Carlson Investments and VR Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlson Investments and VR Factory
The main advantage of trading using opposite Carlson Investments and VR Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlson Investments position performs unexpectedly, VR 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 VR Factory will offset losses from the drop in VR Factory's long position.| Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Detalion Games SA | Carlson Investments vs. Kogeneracja SA | Carlson Investments vs. Asseco South Eastern |
| VR Factory vs. Asseco Business Solutions | VR Factory vs. Detalion Games SA | VR Factory vs. Kogeneracja SA | VR Factory vs. Asseco South Eastern |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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