Correlation Between Gaming Factory and Novavis Group
Can any of the company-specific risk be diversified away by investing in both Gaming Factory and Novavis Group 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 Novavis Group 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 Novavis Group SA, you can compare the effects of market volatilities on Gaming Factory and Novavis Group 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 Novavis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Factory and Novavis Group.
Diversification Opportunities for Gaming Factory and Novavis Group
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gaming and Novavis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Factory SA and Novavis Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavis Group 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 Novavis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavis Group SA has no effect on the direction of Gaming Factory i.e., Gaming Factory and Novavis Group go up and down completely randomly.
Pair Corralation between Gaming Factory and Novavis Group
Assuming the 90 days trading horizon Gaming Factory SA is expected to generate 1.14 times more return on investment than Novavis Group. However, Gaming Factory is 1.14 times more volatile than Novavis Group SA. It trades about 0.03 of its potential returns per unit of risk. Novavis Group SA is currently generating about -0.14 per unit of risk. If you would invest 728.00 in Gaming Factory SA on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Gaming Factory SA or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.25% |
| Values | Daily Returns |
Gaming Factory SA vs. Novavis Group SA
Performance |
| Timeline |
| Gaming Factory SA |
| Novavis Group SA |
Gaming Factory and Novavis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Factory and Novavis Group
The main advantage of trading using opposite Gaming Factory and Novavis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Factory position performs unexpectedly, Novavis Group 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 Novavis Group will offset losses from the drop in Novavis Group's long position.| Gaming Factory vs. SOFTWARE MANSION SPOLKA | Gaming Factory vs. True Games Syndicate | Gaming Factory vs. PZ Cormay SA | Gaming Factory vs. Pyramid Games SA |
| Novavis Group vs. GreenX Metals | Novavis Group vs. TEN SQUARE GAMES | Novavis Group vs. Skyline Investment SA | Novavis Group vs. Cloud Technologies 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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