Correlation Between SD Standard and Gaming Innovation
Can any of the company-specific risk be diversified away by investing in both SD Standard and Gaming Innovation 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 SD Standard and Gaming Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SD Standard Drilling and Gaming Innovation Group, you can compare the effects of market volatilities on SD Standard and Gaming Innovation 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 SD Standard with a short position of Gaming Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of SD Standard and Gaming Innovation.
Diversification Opportunities for SD Standard and Gaming Innovation
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SDSD and Gaming is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding SD Standard Drilling and Gaming Innovation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Innovation and SD Standard 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 SD Standard Drilling are associated (or correlated) with Gaming Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Innovation has no effect on the direction of SD Standard i.e., SD Standard and Gaming Innovation go up and down completely randomly.
Pair Corralation between SD Standard and Gaming Innovation
Assuming the 90 days trading horizon SD Standard Drilling is expected to generate 0.54 times more return on investment than Gaming Innovation. However, SD Standard Drilling is 1.84 times less risky than Gaming Innovation. It trades about -0.01 of its potential returns per unit of risk. Gaming Innovation Group is currently generating about -0.02 per unit of risk. If you would invest 176.00 in SD Standard Drilling on September 1, 2024 and sell it today you would lose (5.00) from holding SD Standard Drilling or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.89% |
| Values | Daily Returns |
SD Standard Drilling vs. Gaming Innovation Group
Performance |
| Timeline |
| SD Standard Drilling |
| Gaming Innovation |
SD Standard and Gaming Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SD Standard and Gaming Innovation
The main advantage of trading using opposite SD Standard and Gaming Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SD Standard position performs unexpectedly, Gaming Innovation 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 Gaming Innovation will offset losses from the drop in Gaming Innovation's long position.| SD Standard vs. Odfjell Drilling | SD Standard vs. Solstad Offsho | SD Standard vs. Reach Subsea | SD Standard vs. Eidesvik Offshore ASA |
| Gaming Innovation vs. Catena Media plc | Gaming Innovation vs. Idex ASA | Gaming Innovation vs. XXL ASA | Gaming Innovation vs. Kitron ASA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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