Correlation Between Gaming Realms and State Bank
Can any of the company-specific risk be diversified away by investing in both Gaming Realms and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on Gaming Realms and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Realms and State Bank.
Diversification Opportunities for Gaming Realms and State Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gaming and State is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Realms plc and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Gaming Realms i.e., Gaming Realms and State Bank go up and down completely randomly.
Pair Corralation between Gaming Realms and State Bank
Assuming the 90 days trading horizon Gaming Realms plc is expected to generate 2.02 times more return on investment than State Bank. However, Gaming Realms is 2.02 times more volatile than State Bank of. It trades about 0.15 of its potential returns per unit of risk. State Bank of is currently generating about 0.03 per unit of risk. If you would invest 3,310 in Gaming Realms plc on August 30, 2024 and sell it today you would earn a total of 380.00 from holding Gaming Realms plc or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Realms plc vs. State Bank of
Performance |
| Timeline |
| Gaming Realms plc |
| State Bank |
Gaming Realms and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Realms and State Bank
The main advantage of trading using opposite Gaming Realms and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Realms position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| Gaming Realms vs. Park Hotels Resorts | Gaming Realms vs. InterContinental Hotels Group | Gaming Realms vs. MT Bank Corp | Gaming Realms vs. Prudential Financial |
| State Bank vs. Axfood AB | State Bank vs. Playtech Plc | State Bank vs. Gaming Realms plc | State Bank vs. Wheaton Precious Metals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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