Correlation Between Small Cap and ACTIVISION
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By analyzing existing cross correlation between Small Cap Premium and ACTIVISION BLIZZARD INC, you can compare the effects of market volatilities on Small Cap and ACTIVISION 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 Small Cap with a short position of ACTIVISION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and ACTIVISION.
Diversification Opportunities for Small Cap and ACTIVISION
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Small and ACTIVISION is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and ACTIVISION BLIZZARD INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTIVISION BLIZZARD INC and Small Cap 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 Small Cap Premium are associated (or correlated) with ACTIVISION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACTIVISION BLIZZARD INC has no effect on the direction of Small Cap i.e., Small Cap and ACTIVISION go up and down completely randomly.
Pair Corralation between Small Cap and ACTIVISION
Considering the 90-day investment horizon Small Cap is expected to generate 28.16 times less return on investment than ACTIVISION. But when comparing it to its historical volatility, Small Cap Premium is 5.13 times less risky than ACTIVISION. It trades about 0.03 of its potential returns per unit of risk. ACTIVISION BLIZZARD INC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,393 in ACTIVISION BLIZZARD INC on August 31, 2024 and sell it today you would earn a total of 482.00 from holding ACTIVISION BLIZZARD INC or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Small Cap Premium vs. ACTIVISION BLIZZARD INC
Performance |
| Timeline |
| Small Cap Premium |
| ACTIVISION BLIZZARD INC |
Small Cap and ACTIVISION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and ACTIVISION
The main advantage of trading using opposite Small Cap and ACTIVISION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, ACTIVISION 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 ACTIVISION will offset losses from the drop in ACTIVISION's long position.| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. First Trust Enhanced | Small Cap vs. Voya Global Advantage |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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