Correlation Between Gaming Realms and Electrica
Can any of the company-specific risk be diversified away by investing in both Gaming Realms and Electrica 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 Realms and Electrica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Realms plc and Electrica SA, you can compare the effects of market volatilities on Gaming Realms and Electrica 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 Realms with a short position of Electrica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Realms and Electrica.
Diversification Opportunities for Gaming Realms and Electrica
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gaming and Electrica is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Realms plc and Electrica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrica SA and Gaming Realms 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 Realms plc are associated (or correlated) with Electrica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrica SA has no effect on the direction of Gaming Realms i.e., Gaming Realms and Electrica go up and down completely randomly.
Pair Corralation between Gaming Realms and Electrica
If you would invest 1,300 in Electrica SA on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Electrica SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Realms plc vs. Electrica SA
Performance |
| Timeline |
| Gaming Realms plc |
| Electrica SA |
Gaming Realms and Electrica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Realms and Electrica
The main advantage of trading using opposite Gaming Realms and Electrica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Realms position performs unexpectedly, Electrica 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 Electrica will offset losses from the drop in Electrica's long position.| Gaming Realms vs. Anglesey Mining | Gaming Realms vs. GoldMining | Gaming Realms vs. METALL ZUG AG | Gaming Realms vs. Gamma Communications PLC |
| Electrica vs. Darden Restaurants | Electrica vs. CVS Health Corp | Electrica vs. Various Eateries PLC | Electrica vs. Fulcrum Metals PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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