Correlation Between Flow Beverage and Enthusiast Gaming
Can any of the company-specific risk be diversified away by investing in both Flow Beverage and Enthusiast 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 Flow Beverage and Enthusiast Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Beverage Corp and Enthusiast Gaming Holdings, you can compare the effects of market volatilities on Flow Beverage and Enthusiast 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 Flow Beverage with a short position of Enthusiast Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Beverage and Enthusiast Gaming.
Diversification Opportunities for Flow Beverage and Enthusiast Gaming
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flow and Enthusiast is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Flow Beverage Corp and Enthusiast Gaming Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enthusiast Gaming and Flow Beverage 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 Flow Beverage Corp are associated (or correlated) with Enthusiast Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enthusiast Gaming has no effect on the direction of Flow Beverage i.e., Flow Beverage and Enthusiast Gaming go up and down completely randomly.
Pair Corralation between Flow Beverage and Enthusiast Gaming
Assuming the 90 days trading horizon Flow Beverage Corp is expected to generate 0.7 times more return on investment than Enthusiast Gaming. However, Flow Beverage Corp is 1.43 times less risky than Enthusiast Gaming. It trades about 0.02 of its potential returns per unit of risk. Enthusiast Gaming Holdings is currently generating about -0.13 per unit of risk. If you would invest 16.00 in Flow Beverage Corp on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Flow Beverage Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Beverage Corp vs. Enthusiast Gaming Holdings
Performance |
| Timeline |
| Flow Beverage Corp |
| Enthusiast Gaming |
Flow Beverage and Enthusiast Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Beverage and Enthusiast Gaming
The main advantage of trading using opposite Flow Beverage and Enthusiast Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Beverage position performs unexpectedly, Enthusiast 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 Enthusiast Gaming will offset losses from the drop in Enthusiast Gaming's long position.The idea behind Flow Beverage Corp and Enthusiast Gaming Holdings 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.| Enthusiast Gaming vs. Bragg Gaming Group | Enthusiast Gaming vs. ESE Entertainment | Enthusiast Gaming vs. Converge Technology Solutions | Enthusiast Gaming vs. Docebo Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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