Correlation Between GI Group and Movie Games
Can any of the company-specific risk be diversified away by investing in both GI Group and Movie Games 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 GI Group and Movie Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GI Group Poland and Movie Games SA, you can compare the effects of market volatilities on GI Group and Movie Games 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 GI Group with a short position of Movie Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of GI Group and Movie Games.
Diversification Opportunities for GI Group and Movie Games
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GIG and Movie is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GI Group Poland and Movie Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movie Games SA and GI Group 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 GI Group Poland are associated (or correlated) with Movie Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movie Games SA has no effect on the direction of GI Group i.e., GI Group and Movie Games go up and down completely randomly.
Pair Corralation between GI Group and Movie Games
Assuming the 90 days trading horizon GI Group Poland is expected to generate 0.52 times more return on investment than Movie Games. However, GI Group Poland is 1.91 times less risky than Movie Games. It trades about 0.01 of its potential returns per unit of risk. Movie Games SA is currently generating about -0.08 per unit of risk. If you would invest 143.00 in GI Group Poland on September 2, 2024 and sell it today you would earn a total of 2.00 from holding GI Group Poland or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GI Group Poland vs. Movie Games SA
Performance |
| Timeline |
| GI Group Poland |
| Movie Games SA |
GI Group and Movie Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GI Group and Movie Games
The main advantage of trading using opposite GI Group and Movie Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GI Group position performs unexpectedly, Movie Games 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 Movie Games will offset losses from the drop in Movie Games' long position.| GI Group vs. Echo Investment SA | GI Group vs. Esotiq Henderson SA | GI Group vs. Asseco South Eastern | GI Group vs. Vercom SA |
| Movie Games vs. Medicofarma Biotech SA | Movie Games vs. Creotech Instruments SA | Movie Games vs. Alior Bank SA | Movie Games 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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