Correlation Between Gaming Factory and Text SA
Can any of the company-specific risk be diversified away by investing in both Gaming Factory and Text SA 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 Text SA 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 Text SA, you can compare the effects of market volatilities on Gaming Factory and Text SA 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 Text SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Factory and Text SA.
Diversification Opportunities for Gaming Factory and Text SA
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaming and Text is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Factory SA and Text SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Text 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 Text SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Text SA has no effect on the direction of Gaming Factory i.e., Gaming Factory and Text SA go up and down completely randomly.
Pair Corralation between Gaming Factory and Text SA
Assuming the 90 days trading horizon Gaming Factory SA is expected to generate 1.38 times more return on investment than Text SA. However, Gaming Factory is 1.38 times more volatile than Text SA. It trades about -0.01 of its potential returns per unit of risk. Text SA is currently generating about -0.19 per unit of risk. If you would invest 800.00 in Gaming Factory SA on August 25, 2024 and sell it today you would lose (42.00) from holding Gaming Factory SA or give up 5.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Factory SA vs. Text SA
Performance |
| Timeline |
| Gaming Factory SA |
| Text SA |
Gaming Factory and Text SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Factory and Text SA
The main advantage of trading using opposite Gaming Factory and Text SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Factory position performs unexpectedly, Text SA 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 Text SA will offset losses from the drop in Text SA's long position.| Gaming Factory vs. CD PROJEKT SA | Gaming Factory vs. 11 bit studios | Gaming Factory vs. Movie Games SA | Gaming Factory vs. Ultimate Games SA |
| Text SA vs. Datawalk SA | Text SA vs. LSI Software SA | Text SA vs. Gaming Factory SA | Text SA vs. Gremi Media 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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