Correlation Between Novina SA and VR Factory
Can any of the company-specific risk be diversified away by investing in both Novina SA and VR 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 Novina SA and VR Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novina SA and VR Factory Games, you can compare the effects of market volatilities on Novina SA and VR 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 Novina SA with a short position of VR Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novina SA and VR Factory.
Diversification Opportunities for Novina SA and VR Factory
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Novina and VRF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Novina SA and VR Factory Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Factory Games and Novina SA 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 Novina SA are associated (or correlated) with VR Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Factory Games has no effect on the direction of Novina SA i.e., Novina SA and VR Factory go up and down completely randomly.
Pair Corralation between Novina SA and VR Factory
Assuming the 90 days trading horizon Novina SA is expected to generate 1.33 times more return on investment than VR Factory. However, Novina SA is 1.33 times more volatile than VR Factory Games. It trades about 0.06 of its potential returns per unit of risk. VR Factory Games is currently generating about -0.02 per unit of risk. If you would invest 69.00 in Novina SA on August 26, 2024 and sell it today you would earn a total of 47.00 from holding Novina SA or generate 68.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Novina SA vs. VR Factory Games
Performance |
| Timeline |
| Novina SA |
| VR Factory Games |
Novina SA and VR Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novina SA and VR Factory
The main advantage of trading using opposite Novina SA and VR Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novina SA position performs unexpectedly, VR 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 VR Factory will offset losses from the drop in VR Factory's long position.| Novina SA vs. Banco Santander SA | Novina SA vs. UniCredit SpA | Novina SA vs. CEZ as | Novina SA vs. Polski Koncern Naftowy |
| VR Factory vs. Asseco Business Solutions | VR Factory vs. Detalion Games SA | VR Factory vs. Asseco South Eastern | VR Factory 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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