Correlation Between Gaming Corps and AVTECH Sweden
Can any of the company-specific risk be diversified away by investing in both Gaming Corps and AVTECH Sweden 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 Gaming Corps and AVTECH Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Corps AB and AVTECH Sweden AB, you can compare the effects of market volatilities on Gaming Corps and AVTECH Sweden 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 Gaming Corps with a short position of AVTECH Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Corps and AVTECH Sweden.
Diversification Opportunities for Gaming Corps and AVTECH Sweden
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaming and AVTECH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Corps AB and AVTECH Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVTECH Sweden AB and Gaming Corps 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 Gaming Corps AB are associated (or correlated) with AVTECH Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVTECH Sweden AB has no effect on the direction of Gaming Corps i.e., Gaming Corps and AVTECH Sweden go up and down completely randomly.
Pair Corralation between Gaming Corps and AVTECH Sweden
Assuming the 90 days trading horizon Gaming Corps AB is expected to generate 2.22 times more return on investment than AVTECH Sweden. However, Gaming Corps is 2.22 times more volatile than AVTECH Sweden AB. It trades about 0.03 of its potential returns per unit of risk. AVTECH Sweden AB is currently generating about -0.26 per unit of risk. If you would invest 68.00 in Gaming Corps AB on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Gaming Corps AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Corps AB vs. AVTECH Sweden AB
Performance |
| Timeline |
| Gaming Corps AB |
| AVTECH Sweden AB |
Gaming Corps and AVTECH Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Corps and AVTECH Sweden
The main advantage of trading using opposite Gaming Corps and AVTECH Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Corps position performs unexpectedly, AVTECH Sweden 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 AVTECH Sweden will offset losses from the drop in AVTECH Sweden's long position.| Gaming Corps vs. Flexion Mobile PLC | Gaming Corps vs. iZafe Group AB | Gaming Corps vs. KABE Group AB | Gaming Corps vs. IAR Systems Group |
| AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Cantargia AB | AVTECH Sweden vs. KABE Group AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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