Correlation Between Gaming Factory and Echo Investment
Can any of the company-specific risk be diversified away by investing in both Gaming Factory and Echo Investment 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 Factory and Echo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Factory SA and Echo Investment SA, you can compare the effects of market volatilities on Gaming Factory and Echo Investment 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 Factory with a short position of Echo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Factory and Echo Investment.
Diversification Opportunities for Gaming Factory and Echo Investment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaming and Echo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Factory SA and Echo Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Investment SA and Gaming Factory 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 Factory SA are associated (or correlated) with Echo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Investment SA has no effect on the direction of Gaming Factory i.e., Gaming Factory and Echo Investment go up and down completely randomly.
Pair Corralation between Gaming Factory and Echo Investment
Assuming the 90 days trading horizon Gaming Factory SA is expected to generate 1.96 times more return on investment than Echo Investment. However, Gaming Factory is 1.96 times more volatile than Echo Investment SA. It trades about 0.03 of its potential returns per unit of risk. Echo Investment SA is currently generating about 0.06 per unit of risk. If you would invest 598.00 in Gaming Factory SA on October 27, 2024 and sell it today you would earn a total of 174.00 from holding Gaming Factory SA or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Factory SA vs. Echo Investment SA
Performance |
| Timeline |
| Gaming Factory SA |
| Echo Investment SA |
Gaming Factory and Echo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Factory and Echo Investment
The main advantage of trading using opposite Gaming Factory and Echo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Factory position performs unexpectedly, Echo Investment 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 Echo Investment will offset losses from the drop in Echo Investment's long position.| Gaming Factory vs. Varsav Game Studios | Gaming Factory vs. Gamedust SA | Gaming Factory vs. Investment Friends Capital | Gaming Factory vs. LSI Software SA |
| Echo Investment vs. MCI Management SA | Echo Investment vs. Investment Friends Capital | Echo Investment vs. X Trade Brokers | Echo Investment vs. Medicalg |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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