Correlation Between Movie Games and New Tech
Can any of the company-specific risk be diversified away by investing in both Movie Games and New Tech 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 New Tech 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 New Tech Venture, you can compare the effects of market volatilities on Movie Games and New Tech 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 New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and New Tech.
Diversification Opportunities for Movie Games and New Tech
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Movie and New is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture 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 New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of Movie Games i.e., Movie Games and New Tech go up and down completely randomly.
Pair Corralation between Movie Games and New Tech
Assuming the 90 days trading horizon Movie Games SA is expected to generate 1.33 times more return on investment than New Tech. However, Movie Games is 1.33 times more volatile than New Tech Venture. It trades about 0.03 of its potential returns per unit of risk. New Tech Venture is currently generating about -0.04 per unit of risk. If you would invest 1,832 in Movie Games SA on November 2, 2024 and sell it today you would earn a total of 56.00 from holding Movie Games SA or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.03% |
| Values | Daily Returns |
Movie Games SA vs. New Tech Venture
Performance |
| Timeline |
| Movie Games SA |
| New Tech Venture |
Movie Games and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and New Tech
The main advantage of trading using opposite Movie Games and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games position performs unexpectedly, New Tech 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 New Tech will offset losses from the drop in New Tech's long position.| Movie Games vs. Kool2play SA | Movie Games vs. All In Games | Movie Games vs. PZ Cormay SA | Movie Games vs. LSI Software SA |
| New Tech vs. Asseco Business Solutions | New Tech vs. Movie Games SA | New Tech vs. Altustfi | New Tech 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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