Correlation Between Movie Games and ED Invest
Can any of the company-specific risk be diversified away by investing in both Movie Games and ED Invest 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 ED Invest 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 ED Invest SA, you can compare the effects of market volatilities on Movie Games and ED Invest 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 ED Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and ED Invest.
Diversification Opportunities for Movie Games and ED Invest
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Movie and EDI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and ED Invest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Invest SA 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 ED Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Invest SA has no effect on the direction of Movie Games i.e., Movie Games and ED Invest go up and down completely randomly.
Pair Corralation between Movie Games and ED Invest
Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the ED Invest. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 2.49 times less risky than ED Invest. The stock trades about -0.38 of its potential returns per unit of risk. The ED Invest SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 560.00 in ED Invest SA on September 4, 2024 and sell it today you would earn a total of 88.00 from holding ED Invest SA or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Movie Games SA vs. ED Invest SA
Performance |
| Timeline |
| Movie Games SA |
| ED Invest SA |
Movie Games and ED Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and ED Invest
The main advantage of trading using opposite Movie Games and ED Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games position performs unexpectedly, ED Invest 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 ED Invest will offset losses from the drop in ED Invest's long position.| Movie Games vs. CD PROJEKT SA | Movie Games vs. PLAYWAY SA | Movie Games vs. 11 bit studios | Movie Games vs. TEN SQUARE GAMES |
| ED Invest vs. Monnari Trade SA | ED Invest vs. New Tech Venture | ED Invest vs. Skyline Investment SA | ED Invest vs. Tower Investments 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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