Correlation Between Galaxy Gaming and Hanover Foods
Can any of the company-specific risk be diversified away by investing in both Galaxy Gaming and Hanover Foods 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 Galaxy Gaming and Hanover Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Gaming and Hanover Foods, you can compare the effects of market volatilities on Galaxy Gaming and Hanover Foods 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 Galaxy Gaming with a short position of Hanover Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Gaming and Hanover Foods.
Diversification Opportunities for Galaxy Gaming and Hanover Foods
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Galaxy and Hanover is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Gaming and Hanover Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Foods and Galaxy Gaming 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 Galaxy Gaming are associated (or correlated) with Hanover Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Foods has no effect on the direction of Galaxy Gaming i.e., Galaxy Gaming and Hanover Foods go up and down completely randomly.
Pair Corralation between Galaxy Gaming and Hanover Foods
Given the investment horizon of 90 days Galaxy Gaming is expected to generate 7.96 times more return on investment than Hanover Foods. However, Galaxy Gaming is 7.96 times more volatile than Hanover Foods. It trades about 0.07 of its potential returns per unit of risk. Hanover Foods is currently generating about -0.06 per unit of risk. If you would invest 155.00 in Galaxy Gaming on October 25, 2024 and sell it today you would earn a total of 121.00 from holding Galaxy Gaming or generate 78.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Gaming vs. Hanover Foods
Performance |
| Timeline |
| Galaxy Gaming |
| Hanover Foods |
Galaxy Gaming and Hanover Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Gaming and Hanover Foods
The main advantage of trading using opposite Galaxy Gaming and Hanover Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Gaming position performs unexpectedly, Hanover Foods 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 Hanover Foods will offset losses from the drop in Hanover Foods' long position.| Galaxy Gaming vs. Intema Solutions | Galaxy Gaming vs. 888 Holdings | Galaxy Gaming vs. Royal Wins | Galaxy Gaming vs. Real Luck Group |
| Hanover Foods vs. Lucid Group | Hanover Foods vs. Visteon Corp | Hanover Foods vs. Wabash National | Hanover Foods vs. Tenaris SA ADR |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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