Correlation Between Transalta and Contagious Gaming
Can any of the company-specific risk be diversified away by investing in both Transalta and Contagious Gaming 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 Transalta and Contagious Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transalta A Cum and Contagious Gaming, you can compare the effects of market volatilities on Transalta and Contagious Gaming 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 Transalta with a short position of Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transalta and Contagious Gaming.
Diversification Opportunities for Transalta and Contagious Gaming
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transalta and Contagious is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transalta A Cum and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming and Transalta 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 Transalta A Cum are associated (or correlated) with Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of Transalta i.e., Transalta and Contagious Gaming go up and down completely randomly.
Pair Corralation between Transalta and Contagious Gaming
Assuming the 90 days trading horizon Transalta is expected to generate 3.68 times less return on investment than Contagious Gaming. But when comparing it to its historical volatility, Transalta A Cum is 8.18 times less risky than Contagious Gaming. It trades about 0.08 of its potential returns per unit of risk. Contagious Gaming is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Contagious Gaming on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Contagious Gaming or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transalta A Cum vs. Contagious Gaming
Performance |
| Timeline |
| Transalta A Cum |
| Contagious Gaming |
Transalta and Contagious Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transalta and Contagious Gaming
The main advantage of trading using opposite Transalta and Contagious Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transalta position performs unexpectedly, Contagious Gaming 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 Contagious Gaming will offset losses from the drop in Contagious Gaming's long position.| Transalta vs. CVS HEALTH CDR | Transalta vs. Nova Leap Health | Transalta vs. UnitedHealth Group CDR | Transalta vs. Altair Resources |
| Contagious Gaming vs. Berkshire Hathaway CDR | Contagious Gaming vs. Microsoft Corp CDR | Contagious Gaming vs. Apple Inc CDR | Contagious Gaming vs. Alphabet Inc CDR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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