Correlation Between Neo Concept and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both Neo Concept and Esports Entertainment 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 Neo Concept and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Concept International Group and Esports Entertainment Group, you can compare the effects of market volatilities on Neo Concept and Esports Entertainment 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 Neo Concept with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Concept and Esports Entertainment.
Diversification Opportunities for Neo Concept and Esports Entertainment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neo and Esports is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Neo Concept International Grou and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment and Neo Concept 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 Neo Concept International Group are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of Neo Concept i.e., Neo Concept and Esports Entertainment go up and down completely randomly.
Pair Corralation between Neo Concept and Esports Entertainment
Considering the 90-day investment horizon Neo Concept International Group is expected to under-perform the Esports Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Neo Concept International Group is 4.06 times less risky than Esports Entertainment. The stock trades about -0.06 of its potential returns per unit of risk. The Esports Entertainment Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2.48 in Esports Entertainment Group on September 2, 2024 and sell it today you would lose (2.04) from holding Esports Entertainment Group or give up 82.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 53.55% |
| Values | Daily Returns |
Neo Concept International Grou vs. Esports Entertainment Group
Performance |
| Timeline |
| Neo Concept Internat |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Neo Concept and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Concept and Esports Entertainment
The main advantage of trading using opposite Neo Concept and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Concept position performs unexpectedly, Esports Entertainment 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.| Neo Concept vs. Air Products and | Neo Concept vs. Waste Management | Neo Concept vs. Ecovyst | Neo Concept vs. Hudson Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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