Correlation Between New Tech and True Games
Can any of the company-specific risk be diversified away by investing in both New Tech and True Games 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 New Tech and True Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Tech Venture and True Games Syndicate, you can compare the effects of market volatilities on New Tech and True Games 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 New Tech with a short position of True Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Tech and True Games.
Diversification Opportunities for New Tech and True Games
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and True is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding New Tech Venture and True Games Syndicate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True Games Syndicate and New Tech 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 New Tech Venture are associated (or correlated) with True Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True Games Syndicate has no effect on the direction of New Tech i.e., New Tech and True Games go up and down completely randomly.
Pair Corralation between New Tech and True Games
Assuming the 90 days trading horizon New Tech Venture is expected to generate 0.92 times more return on investment than True Games. However, New Tech Venture is 1.09 times less risky than True Games. It trades about 0.28 of its potential returns per unit of risk. True Games Syndicate is currently generating about -0.13 per unit of risk. If you would invest 11.00 in New Tech Venture on October 21, 2024 and sell it today you would earn a total of 1.00 from holding New Tech Venture or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.31% |
| Values | Daily Returns |
New Tech Venture vs. True Games Syndicate
Performance |
| Timeline |
| New Tech Venture |
| True Games Syndicate |
New Tech and True Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Tech and True Games
The main advantage of trading using opposite New Tech and True Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Tech position performs unexpectedly, True Games 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 True Games will offset losses from the drop in True Games' long position.| New Tech vs. Movie Games SA | New Tech vs. Carlson Investments SA | New Tech vs. Saule Technologies SA | New Tech vs. LSI Software SA |
| True Games vs. PZ Cormay SA | True Games vs. Creotech Instruments SA | True Games vs. CI Games SA | True Games vs. New Tech Venture |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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