Correlation Between Gaming Innovation and SoftOx Solutions
Can any of the company-specific risk be diversified away by investing in both Gaming Innovation and SoftOx Solutions 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 SoftOx Solutions 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 SoftOx Solutions AS, you can compare the effects of market volatilities on Gaming Innovation and SoftOx Solutions 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 SoftOx Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Innovation and SoftOx Solutions.
Diversification Opportunities for Gaming Innovation and SoftOx Solutions
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaming and SoftOx is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Innovation Group and SoftOx Solutions AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftOx Solutions 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 SoftOx Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftOx Solutions has no effect on the direction of Gaming Innovation i.e., Gaming Innovation and SoftOx Solutions go up and down completely randomly.
Pair Corralation between Gaming Innovation and SoftOx Solutions
Assuming the 90 days trading horizon Gaming Innovation Group is expected to generate 0.36 times more return on investment than SoftOx Solutions. However, Gaming Innovation Group is 2.76 times less risky than SoftOx Solutions. It trades about -0.11 of its potential returns per unit of risk. SoftOx Solutions AS is currently generating about -0.17 per unit of risk. If you would invest 2,750 in Gaming Innovation Group on August 30, 2024 and sell it today you would lose (280.00) from holding Gaming Innovation Group or give up 10.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gaming Innovation Group vs. SoftOx Solutions AS
Performance |
| Timeline |
| Gaming Innovation |
| SoftOx Solutions |
Gaming Innovation and SoftOx Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Innovation and SoftOx Solutions
The main advantage of trading using opposite Gaming Innovation and SoftOx Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Innovation position performs unexpectedly, SoftOx Solutions 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 SoftOx Solutions will offset losses from the drop in SoftOx Solutions' long position.| Gaming Innovation vs. Catena Media plc | Gaming Innovation vs. Idex ASA | Gaming Innovation vs. XXL ASA | Gaming Innovation vs. Kitron ASA |
| SoftOx Solutions vs. Gaming Innovation Group | SoftOx Solutions vs. Techstep ASA | SoftOx Solutions vs. Romsdal Sparebank | SoftOx Solutions vs. Nordic Technology Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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