Correlation Between Gaming Innovation and Romerike Sparebank
Can any of the company-specific risk be diversified away by investing in both Gaming Innovation and Romerike Sparebank 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 Innovation and Romerike Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Innovation Group and Romerike Sparebank, you can compare the effects of market volatilities on Gaming Innovation and Romerike Sparebank 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 Innovation with a short position of Romerike Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Innovation and Romerike Sparebank.
Diversification Opportunities for Gaming Innovation and Romerike Sparebank
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaming and Romerike is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Innovation Group and Romerike Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Romerike Sparebank and Gaming Innovation 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 Innovation Group are associated (or correlated) with Romerike Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Romerike Sparebank has no effect on the direction of Gaming Innovation i.e., Gaming Innovation and Romerike Sparebank go up and down completely randomly.
Pair Corralation between Gaming Innovation and Romerike Sparebank
Assuming the 90 days trading horizon Gaming Innovation Group is expected to under-perform the Romerike Sparebank. In addition to that, Gaming Innovation is 2.47 times more volatile than Romerike Sparebank. It trades about -0.01 of its total potential returns per unit of risk. Romerike Sparebank is currently generating about 0.17 per unit of volatility. If you would invest 12,200 in Romerike Sparebank on August 29, 2024 and sell it today you would earn a total of 386.00 from holding Romerike Sparebank or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gaming Innovation Group vs. Romerike Sparebank
Performance |
| Timeline |
| Gaming Innovation |
| Romerike Sparebank |
Gaming Innovation and Romerike Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Innovation and Romerike Sparebank
The main advantage of trading using opposite Gaming Innovation and Romerike Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Innovation position performs unexpectedly, Romerike Sparebank 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 Romerike Sparebank will offset losses from the drop in Romerike Sparebank's long position.| Gaming Innovation vs. Catena Media plc | Gaming Innovation vs. Idex ASA | Gaming Innovation vs. XXL ASA | Gaming Innovation vs. Kitron ASA |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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