Correlation Between True Games and Echo Investment
Can any of the company-specific risk be diversified away by investing in both True Games and Echo Investment 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 True Games and Echo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between True Games Syndicate and Echo Investment SA, you can compare the effects of market volatilities on True Games and Echo Investment 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 True Games with a short position of Echo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of True Games and Echo Investment.
Diversification Opportunities for True Games and Echo Investment
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between True and Echo is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate and Echo Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Investment SA and True Games 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 True Games Syndicate are associated (or correlated) with Echo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Investment SA has no effect on the direction of True Games i.e., True Games and Echo Investment go up and down completely randomly.
Pair Corralation between True Games and Echo Investment
Assuming the 90 days trading horizon True Games Syndicate is expected to generate 2.48 times more return on investment than Echo Investment. However, True Games is 2.48 times more volatile than Echo Investment SA. It trades about -0.05 of its potential returns per unit of risk. Echo Investment SA is currently generating about -0.4 per unit of risk. If you would invest 46.00 in True Games Syndicate on November 7, 2024 and sell it today you would lose (1.00) from holding True Games Syndicate or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
True Games Syndicate vs. Echo Investment SA
Performance |
| Timeline |
| True Games Syndicate |
| Echo Investment SA |
True Games and Echo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with True Games and Echo Investment
The main advantage of trading using opposite True Games and Echo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if True Games position performs unexpectedly, Echo Investment 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 Echo Investment will offset losses from the drop in Echo Investment's long position.| True Games vs. GreenX Metals | True Games vs. Bank Millennium SA | True Games vs. Mlk Foods Public | True Games vs. Marie Brizard Wine |
| Echo Investment vs. Santander Bank Polska | Echo Investment vs. ING Bank lski | Echo Investment vs. Mlk Foods Public | Echo Investment vs. MCI Management SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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