Correlation Between Comp SA and ECC Games
Can any of the company-specific risk be diversified away by investing in both Comp SA and ECC Games 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 Comp SA and ECC Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comp SA and ECC Games SA, you can compare the effects of market volatilities on Comp SA and ECC Games 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 Comp SA with a short position of ECC Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comp SA and ECC Games.
Diversification Opportunities for Comp SA and ECC Games
Good diversification
The 3 months correlation between Comp and ECC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Comp SA and ECC Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECC Games SA and Comp SA 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 Comp SA are associated (or correlated) with ECC Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECC Games SA has no effect on the direction of Comp SA i.e., Comp SA and ECC Games go up and down completely randomly.
Pair Corralation between Comp SA and ECC Games
Assuming the 90 days trading horizon Comp SA is expected to generate 0.14 times more return on investment than ECC Games. However, Comp SA is 6.97 times less risky than ECC Games. It trades about 0.24 of its potential returns per unit of risk. ECC Games SA is currently generating about -0.08 per unit of risk. If you would invest 11,200 in Comp SA on September 2, 2024 and sell it today you would earn a total of 650.00 from holding Comp SA or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Comp SA vs. ECC Games SA
Performance |
| Timeline |
| Comp SA |
| ECC Games SA |
Comp SA and ECC Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comp SA and ECC Games
The main advantage of trading using opposite Comp SA and ECC Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comp SA position performs unexpectedly, ECC Games 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 ECC Games will offset losses from the drop in ECC Games' long position.| Comp SA vs. Intersport Polska SA | Comp SA vs. Saule Technologies SA | Comp SA vs. Noble Financials SA | Comp SA vs. Gaming Factory SA |
| ECC Games vs. Inter Cars SA | ECC Games vs. UniCredit SpA | ECC Games vs. ING Bank lski | ECC Games vs. Cloud Technologies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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