Correlation Between Play2Chill and Live Motion
Can any of the company-specific risk be diversified away by investing in both Play2Chill and Live Motion 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 Play2Chill and Live Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Play2Chill SA and Live Motion Games, you can compare the effects of market volatilities on Play2Chill and Live Motion 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 Play2Chill with a short position of Live Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Play2Chill and Live Motion.
Diversification Opportunities for Play2Chill and Live Motion
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Play2Chill and Live is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Play2Chill SA and Live Motion Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Motion Games and Play2Chill 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 Play2Chill SA are associated (or correlated) with Live Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Motion Games has no effect on the direction of Play2Chill i.e., Play2Chill and Live Motion go up and down completely randomly.
Pair Corralation between Play2Chill and Live Motion
Assuming the 90 days trading horizon Play2Chill SA is expected to generate 0.49 times more return on investment than Live Motion. However, Play2Chill SA is 2.02 times less risky than Live Motion. It trades about -0.01 of its potential returns per unit of risk. Live Motion Games is currently generating about -0.07 per unit of risk. If you would invest 473.00 in Play2Chill SA on September 14, 2024 and sell it today you would lose (67.00) from holding Play2Chill SA or give up 14.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.66% |
| Values | Daily Returns |
Play2Chill SA vs. Live Motion Games
Performance |
| Timeline |
| Play2Chill SA |
| Live Motion Games |
Play2Chill and Live Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Play2Chill and Live Motion
The main advantage of trading using opposite Play2Chill and Live Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Play2Chill position performs unexpectedly, Live Motion 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 Live Motion will offset losses from the drop in Live Motion's long position.| Play2Chill vs. NGG | Play2Chill vs. Asseco Business Solutions | Play2Chill vs. Asseco South Eastern | Play2Chill vs. HM Inwest SA |
| Live Motion vs. Creativeforge Games SA | Live Motion vs. ECC Games SA | Live Motion vs. Asseco Business Solutions | Live Motion vs. Asseco South Eastern |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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