Correlation Between Movie Games and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both Movie Games 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 Movie Games and Gaming Factory 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 Gaming Factory SA, you can compare the effects of market volatilities on Movie Games 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 Movie Games with a short position of Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and Gaming Factory.
Diversification Opportunities for Movie Games and Gaming Factory
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Movie and Gaming is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games 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 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 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 Movie Games i.e., Movie Games and Gaming Factory go up and down completely randomly.
Pair Corralation between Movie Games and Gaming Factory
Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the Gaming Factory. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 1.07 times less risky than Gaming Factory. The stock trades about -0.12 of its potential returns per unit of risk. The Gaming Factory SA is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,255 in Gaming Factory SA on August 29, 2024 and sell it today you would lose (519.00) from holding Gaming Factory SA or give up 41.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Movie Games SA vs. Gaming Factory SA
Performance |
| Timeline |
| Movie Games SA |
| Gaming Factory SA |
Movie Games and Gaming Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and Gaming Factory
The main advantage of trading using opposite Movie Games and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games 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.The idea behind Movie Games SA and Gaming Factory SA 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.| Gaming Factory vs. X Trade Brokers | Gaming Factory vs. Ice Code Games | Gaming Factory vs. Baked Games SA | Gaming Factory vs. 3R 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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