Correlation Between LPP SA and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both LPP SA and Gaming Factory 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 LPP SA and Gaming Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPP SA and Gaming Factory SA, you can compare the effects of market volatilities on LPP SA and Gaming Factory 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 LPP SA with a short position of Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPP SA and Gaming Factory.
Diversification Opportunities for LPP SA and Gaming Factory
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPP and Gaming is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding LPP SA and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory SA and LPP SA 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 LPP SA are associated (or correlated) with Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of LPP SA i.e., LPP SA and Gaming Factory go up and down completely randomly.
Pair Corralation between LPP SA and Gaming Factory
Assuming the 90 days trading horizon LPP SA is expected to generate 0.91 times more return on investment than Gaming Factory. However, LPP SA is 1.1 times less risky than Gaming Factory. It trades about 0.05 of its potential returns per unit of risk. Gaming Factory SA is currently generating about 0.03 per unit of risk. If you would invest 903,403 in LPP SA on August 28, 2024 and sell it today you would earn a total of 648,597 from holding LPP SA or generate 71.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPP SA vs. Gaming Factory SA
Performance |
| Timeline |
| LPP SA |
| Gaming Factory SA |
LPP SA and Gaming Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPP SA and Gaming Factory
The main advantage of trading using opposite LPP SA and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPP SA position performs unexpectedly, Gaming Factory 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 Factory will offset losses from the drop in Gaming Factory's long position.| LPP SA vs. Pixel Crow Games | LPP SA vs. MW Trade SA | LPP SA vs. MCI Management SA | LPP SA vs. Ice Code Games |
| Gaming Factory vs. CD PROJEKT SA | Gaming Factory vs. Movie Games SA | Gaming Factory vs. Ultimate Games SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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