Correlation Between IGM Financial and Champion Gaming

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Can any of the company-specific risk be diversified away by investing in both IGM Financial and Champion Gaming 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 IGM Financial and Champion Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Champion Gaming Group, you can compare the effects of market volatilities on IGM Financial and Champion Gaming 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 IGM Financial with a short position of Champion Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Champion Gaming.

Diversification Opportunities for IGM Financial and Champion Gaming

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between IGM and Champion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Champion Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Gaming Group and IGM Financial 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 IGM Financial are associated (or correlated) with Champion Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Gaming Group has no effect on the direction of IGM Financial i.e., IGM Financial and Champion Gaming go up and down completely randomly.

Pair Corralation between IGM Financial and Champion Gaming

If you would invest  4,233  in IGM Financial on September 5, 2024 and sell it today you would earn a total of  516.00  from holding IGM Financial or generate 12.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

IGM Financial  vs.  Champion Gaming Group

 Performance 
       Timeline  
IGM Financial 

Risk-Adjusted Performance

30 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in IGM Financial are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, IGM Financial displayed solid returns over the last few months and may actually be approaching a breakup point.
Champion Gaming Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Champion Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Champion Gaming is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

IGM Financial and Champion Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IGM Financial and Champion Gaming

The main advantage of trading using opposite IGM Financial and Champion Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Champion Gaming 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 Champion Gaming will offset losses from the drop in Champion Gaming's long position.
The idea behind IGM Financial and Champion Gaming Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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