Correlation Between Movie Games and ADX
Can any of the company-specific risk be diversified away by investing in both Movie Games and ADX 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 Movie Games and ADX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Movie Games SA and ADX, you can compare the effects of market volatilities on Movie Games and ADX 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 Movie Games with a short position of ADX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and ADX.
Diversification Opportunities for Movie Games and ADX
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Movie and ADX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and ADX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADX and Movie Games 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 Movie Games SA are associated (or correlated) with ADX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADX has no effect on the direction of Movie Games i.e., Movie Games and ADX go up and down completely randomly.
Pair Corralation between Movie Games and ADX
Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the ADX. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 1.65 times less risky than ADX. The stock trades about 0.0 of its potential returns per unit of risk. The ADX is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 33.00 in ADX on September 19, 2024 and sell it today you would lose (5.00) from holding ADX or give up 15.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.71% |
| Values | Daily Returns |
Movie Games SA vs. ADX
Performance |
| Timeline |
| Movie Games SA |
| ADX |
Movie Games and ADX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and ADX
The main advantage of trading using opposite Movie Games and ADX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games position performs unexpectedly, ADX 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 ADX will offset losses from the drop in ADX's long position.| Movie Games vs. CD PROJEKT SA | Movie Games vs. PLAYWAY SA | Movie Games vs. TEN SQUARE GAMES | Movie Games vs. CI Games SA |
| ADX vs. Asseco Business Solutions | ADX vs. Asseco South Eastern | ADX vs. HM Inwest SA | ADX vs. Movie 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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