Correlation Between Gaming Factory and Logintrade
Can any of the company-specific risk be diversified away by investing in both Gaming Factory and Logintrade 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 Logintrade 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 Logintrade SA, you can compare the effects of market volatilities on Gaming Factory and Logintrade 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 Logintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Factory and Logintrade.
Diversification Opportunities for Gaming Factory and Logintrade
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaming and Logintrade is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Factory SA and Logintrade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logintrade 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 Logintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logintrade SA has no effect on the direction of Gaming Factory i.e., Gaming Factory and Logintrade go up and down completely randomly.
Pair Corralation between Gaming Factory and Logintrade
Assuming the 90 days trading horizon Gaming Factory is expected to generate 3.52 times less return on investment than Logintrade. But when comparing it to its historical volatility, Gaming Factory SA is 1.43 times less risky than Logintrade. It trades about 0.03 of its potential returns per unit of risk. Logintrade SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Logintrade SA on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Logintrade SA or generate 74.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.65% |
| Values | Daily Returns |
Gaming Factory SA vs. Logintrade SA
Performance |
| Timeline |
| Gaming Factory SA |
| Logintrade SA |
Gaming Factory and Logintrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Factory and Logintrade
The main advantage of trading using opposite Gaming Factory and Logintrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Factory position performs unexpectedly, Logintrade 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 Logintrade will offset losses from the drop in Logintrade's long position.The idea behind Gaming Factory SA and Logintrade SA 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.| Logintrade vs. Banco Santander SA | Logintrade vs. UniCredit SpA | Logintrade vs. CEZ as | Logintrade vs. Polski Koncern Naftowy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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