Correlation Between Freedom Bank and Global Gaming

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Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Global 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 Freedom Bank and Global Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and Global Gaming Technologies, you can compare the effects of market volatilities on Freedom Bank and Global 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 Freedom Bank with a short position of Global Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Global Gaming.

Diversification Opportunities for Freedom Bank and Global Gaming

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Freedom and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Global Gaming Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gaming Techno and Freedom Bank 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 Freedom Bank of are associated (or correlated) with Global Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gaming Techno has no effect on the direction of Freedom Bank i.e., Freedom Bank and Global Gaming go up and down completely randomly.

Pair Corralation between Freedom Bank and Global Gaming

If you would invest  0.00  in Global Gaming Technologies on December 31, 2024 and sell it today you would earn a total of  0.00  from holding Global Gaming Technologies or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Freedom Bank of  vs.  Global Gaming Technologies

 Performance 
       Timeline  
Freedom Bank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Freedom Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Freedom Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Global Gaming Techno 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Global Gaming Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Freedom Bank and Global Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Freedom Bank and Global Gaming

The main advantage of trading using opposite Freedom Bank and Global Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Global 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 Global Gaming will offset losses from the drop in Global Gaming's long position.
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The idea behind Freedom Bank of and Global Gaming Technologies 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.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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