Correlation Between Fact and Contagious Gaming
Can any of the company-specific risk be diversified away by investing in both Fact and Contagious Gaming 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 Fact and Contagious Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fact Inc and Contagious Gaming, you can compare the effects of market volatilities on Fact and Contagious Gaming 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 Fact with a short position of Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fact and Contagious Gaming.
Diversification Opportunities for Fact and Contagious Gaming
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fact and Contagious is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fact Inc and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming and Fact 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 Fact Inc are associated (or correlated) with Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of Fact i.e., Fact and Contagious Gaming go up and down completely randomly.
Pair Corralation between Fact and Contagious Gaming
Given the investment horizon of 90 days Fact Inc is expected to generate 1.9 times more return on investment than Contagious Gaming. However, Fact is 1.9 times more volatile than Contagious Gaming. It trades about 0.0 of its potential returns per unit of risk. Contagious Gaming is currently generating about 0.0 per unit of risk. If you would invest 1.00 in Fact Inc on August 28, 2024 and sell it today you would lose (0.99) from holding Fact Inc or give up 99.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fact Inc vs. Contagious Gaming
Performance |
| Timeline |
| Fact Inc |
| Contagious Gaming |
Fact and Contagious Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fact and Contagious Gaming
The main advantage of trading using opposite Fact and Contagious Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fact position performs unexpectedly, Contagious Gaming 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 Contagious Gaming will offset losses from the drop in Contagious Gaming's long position.The idea behind Fact Inc and Contagious Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Contagious Gaming vs. FitLife Brands, Common | Contagious Gaming vs. HUMANA INC | Contagious Gaming vs. SCOR PK | Contagious Gaming vs. Aquagold International |
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 Stocks Directory module to find actively traded stocks across global markets.
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