Correlation Between Gamedust and NGG
Can any of the company-specific risk be diversified away by investing in both Gamedust and NGG 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 Gamedust and NGG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamedust SA and NGG, you can compare the effects of market volatilities on Gamedust and NGG 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 Gamedust with a short position of NGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamedust and NGG.
Diversification Opportunities for Gamedust and NGG
Modest diversification
The 3 months correlation between Gamedust and NGG is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gamedust SA and NGG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGG and Gamedust 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 Gamedust SA are associated (or correlated) with NGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGG has no effect on the direction of Gamedust i.e., Gamedust and NGG go up and down completely randomly.
Pair Corralation between Gamedust and NGG
Assuming the 90 days trading horizon Gamedust SA is expected to under-perform the NGG. In addition to that, Gamedust is 1.03 times more volatile than NGG. It trades about -0.14 of its total potential returns per unit of risk. NGG is currently generating about -0.01 per unit of volatility. If you would invest 3.44 in NGG on August 25, 2024 and sell it today you would lose (0.12) from holding NGG or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Gamedust SA vs. NGG
Performance |
| Timeline |
| Gamedust SA |
| NGG |
Gamedust and NGG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamedust and NGG
The main advantage of trading using opposite Gamedust and NGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamedust position performs unexpectedly, NGG 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 NGG will offset losses from the drop in NGG's long position.| Gamedust vs. NGG | Gamedust vs. Asseco Business Solutions | Gamedust vs. Detalion Games SA | Gamedust vs. Asseco South Eastern |
| NGG vs. Asseco Business Solutions | NGG vs. Detalion Games SA | NGG vs. Asseco South Eastern | NGG vs. Movie 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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