Correlation Between Echo Investment and Live Motion
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Live Motion 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 Echo Investment and Live Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echo Investment SA and Live Motion Games, you can compare the effects of market volatilities on Echo Investment and Live Motion 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 Echo Investment with a short position of Live Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Live Motion.
Diversification Opportunities for Echo Investment and Live Motion
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Echo and Live is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Live Motion Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Motion Games and Echo Investment 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 Echo Investment SA are associated (or correlated) with Live Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Motion Games has no effect on the direction of Echo Investment i.e., Echo Investment and Live Motion go up and down completely randomly.
Pair Corralation between Echo Investment and Live Motion
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 0.66 times more return on investment than Live Motion. However, Echo Investment SA is 1.52 times less risky than Live Motion. It trades about 0.03 of its potential returns per unit of risk. Live Motion Games is currently generating about -0.44 per unit of risk. If you would invest 440.00 in Echo Investment SA on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Echo Investment SA or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Echo Investment SA vs. Live Motion Games
Performance |
| Timeline |
| Echo Investment SA |
| Live Motion Games |
Echo Investment and Live Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Live Motion
The main advantage of trading using opposite Echo Investment and Live Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Live Motion 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 Live Motion will offset losses from the drop in Live Motion's long position.| Echo Investment vs. Poznanska Korporacja Budowlana | Echo Investment vs. Esotiq Henderson SA | Echo Investment vs. Toya SA | Echo Investment vs. Betacom SA |
| Live Motion vs. Creativeforge Games SA | Live Motion vs. ECC Games SA | Live Motion vs. Asseco Business Solutions | Live Motion vs. Detalion Games 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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