Correlation Between ECC Games and Comp SA
Can any of the company-specific risk be diversified away by investing in both ECC Games and Comp SA 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 ECC Games and Comp SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECC Games SA and Comp SA, you can compare the effects of market volatilities on ECC Games and Comp SA 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 ECC Games with a short position of Comp SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECC Games and Comp SA.
Diversification Opportunities for ECC Games and Comp SA
Good diversification
The 3 months correlation between ECC and Comp is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ECC Games SA and Comp SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comp SA and ECC 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 ECC Games SA are associated (or correlated) with Comp SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comp SA has no effect on the direction of ECC Games i.e., ECC Games and Comp SA go up and down completely randomly.
Pair Corralation between ECC Games and Comp SA
Assuming the 90 days trading horizon ECC Games SA is expected to under-perform the Comp SA. In addition to that, ECC Games is 6.97 times more volatile than Comp SA. It trades about -0.08 of its total potential returns per unit of risk. Comp SA is currently generating about 0.24 per unit of volatility. 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 |
ECC Games SA vs. Comp SA
Performance |
| Timeline |
| ECC Games SA |
| Comp SA |
ECC Games and Comp SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECC Games and Comp SA
The main advantage of trading using opposite ECC Games and Comp SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECC Games position performs unexpectedly, Comp SA 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 Comp SA will offset losses from the drop in Comp SA's long position.| ECC Games vs. Inter Cars SA | ECC Games vs. UniCredit SpA | ECC Games vs. ING Bank lski | ECC Games vs. Cloud Technologies SA |
| Comp SA vs. Intersport Polska SA | Comp SA vs. Saule Technologies SA | Comp SA vs. Noble Financials SA | Comp SA vs. Gaming Factory 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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