Correlation Between Herald Investment and Gaming Realms
Can any of the company-specific risk be diversified away by investing in both Herald Investment and Gaming Realms 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 Herald Investment and Gaming Realms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herald Investment Trust and Gaming Realms plc, you can compare the effects of market volatilities on Herald Investment and Gaming Realms 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 Herald Investment with a short position of Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and Gaming Realms.
Diversification Opportunities for Herald Investment and Gaming Realms
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herald and Gaming is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms plc and Herald Investment 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 Herald Investment Trust are associated (or correlated) with Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of Herald Investment i.e., Herald Investment and Gaming Realms go up and down completely randomly.
Pair Corralation between Herald Investment and Gaming Realms
Assuming the 90 days trading horizon Herald Investment Trust is expected to generate 0.66 times more return on investment than Gaming Realms. However, Herald Investment Trust is 1.51 times less risky than Gaming Realms. It trades about 0.32 of its potential returns per unit of risk. Gaming Realms plc is currently generating about -0.1 per unit of risk. If you would invest 217,000 in Herald Investment Trust on September 20, 2024 and sell it today you would earn a total of 21,000 from holding Herald Investment Trust or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Herald Investment Trust vs. Gaming Realms plc
Performance |
| Timeline |
| Herald Investment Trust |
| Gaming Realms plc |
Herald Investment and Gaming Realms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herald Investment and Gaming Realms
The main advantage of trading using opposite Herald Investment and Gaming Realms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment position performs unexpectedly, Gaming Realms 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 Gaming Realms will offset losses from the drop in Gaming Realms' long position.| Herald Investment vs. Panther Metals PLC | Herald Investment vs. Diversified Energy | Herald Investment vs. Deltex Medical Group | Herald Investment vs. Monks Investment Trust |
| Gaming Realms vs. Herald Investment Trust | Gaming Realms vs. Bankers Investment Trust | Gaming Realms vs. Kinnevik Investment AB | Gaming Realms vs. DFS Furniture 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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