Correlation Between True Games and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both True Games and Gaming Factory 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 Gaming Factory 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 Gaming Factory SA, you can compare the effects of market volatilities on True Games and Gaming Factory 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 Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of True Games and Gaming Factory.
Diversification Opportunities for True Games and Gaming Factory
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between True and Gaming is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory 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 Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of True Games i.e., True Games and Gaming Factory go up and down completely randomly.
Pair Corralation between True Games and Gaming Factory
Assuming the 90 days trading horizon True Games Syndicate is expected to generate 0.59 times more return on investment than Gaming Factory. However, True Games Syndicate is 1.7 times less risky than Gaming Factory. It trades about -0.1 of its potential returns per unit of risk. Gaming Factory SA is currently generating about -0.07 per unit of risk. If you would invest 50.00 in True Games Syndicate on September 1, 2024 and sell it today you would lose (3.00) from holding True Games Syndicate or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
True Games Syndicate vs. Gaming Factory SA
Performance |
| Timeline |
| True Games Syndicate |
| Gaming Factory SA |
True Games and Gaming Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with True Games and Gaming Factory
The main advantage of trading using opposite True Games and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if True Games position performs unexpectedly, Gaming Factory 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 Factory will offset losses from the drop in Gaming Factory's long position.| True Games vs. mBank SA | True Games vs. BNP Paribas Bank | True Games vs. Gamedust SA | True Games vs. GreenX Metals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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