Correlation Between SohuCom and GameOn Entertainment
Can any of the company-specific risk be diversified away by investing in both SohuCom and GameOn Entertainment 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 SohuCom and GameOn Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SohuCom and GameOn Entertainment Technologies, you can compare the effects of market volatilities on SohuCom and GameOn Entertainment 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 SohuCom with a short position of GameOn Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SohuCom and GameOn Entertainment.
Diversification Opportunities for SohuCom and GameOn Entertainment
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SohuCom and GameOn is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SohuCom and GameOn Entertainment Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameOn Entertainment and SohuCom 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 SohuCom are associated (or correlated) with GameOn Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameOn Entertainment has no effect on the direction of SohuCom i.e., SohuCom and GameOn Entertainment go up and down completely randomly.
Pair Corralation between SohuCom and GameOn Entertainment
Given the investment horizon of 90 days SohuCom is expected to generate 3.95 times less return on investment than GameOn Entertainment. But when comparing it to its historical volatility, SohuCom is 8.47 times less risky than GameOn Entertainment. It trades about 0.31 of its potential returns per unit of risk. GameOn Entertainment Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.60 in GameOn Entertainment Technologies on November 18, 2024 and sell it today you would earn a total of 0.10 from holding GameOn Entertainment Technologies or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SohuCom vs. GameOn Entertainment Technolog
Performance |
| Timeline |
| SohuCom |
| GameOn Entertainment |
SohuCom and GameOn Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SohuCom and GameOn Entertainment
The main advantage of trading using opposite SohuCom and GameOn Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SohuCom position performs unexpectedly, GameOn Entertainment 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 GameOn Entertainment will offset losses from the drop in GameOn Entertainment's long position.| SohuCom vs. Snail, Class A | SohuCom vs. Playstudios | SohuCom vs. Playtika Holding Corp | SohuCom vs. Doubledown Interactive Co |
| GameOn Entertainment vs. NEXON Co | GameOn Entertainment vs. i3 Interactive | GameOn Entertainment vs. Playstudios | GameOn Entertainment vs. Doubledown Interactive Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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