Correlation Between UF Games and Noble Financials
Can any of the company-specific risk be diversified away by investing in both UF Games and Noble Financials 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 UF Games and Noble Financials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UF Games SA and Noble Financials SA, you can compare the effects of market volatilities on UF Games and Noble Financials 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 UF Games with a short position of Noble Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and Noble Financials.
Diversification Opportunities for UF Games and Noble Financials
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UFG and Noble is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and Noble Financials SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Financials and UF 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 UF Games SA are associated (or correlated) with Noble Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Financials has no effect on the direction of UF Games i.e., UF Games and Noble Financials go up and down completely randomly.
Pair Corralation between UF Games and Noble Financials
Assuming the 90 days trading horizon UF Games SA is expected to under-perform the Noble Financials. But the stock apears to be less risky and, when comparing its historical volatility, UF Games SA is 1.79 times less risky than Noble Financials. The stock trades about -0.02 of its potential returns per unit of risk. The Noble Financials SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,660 in Noble Financials SA on August 24, 2024 and sell it today you would lose (40.00) from holding Noble Financials SA or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.97% |
| Values | Daily Returns |
UF Games SA vs. Noble Financials SA
Performance |
| Timeline |
| UF Games SA |
| Noble Financials |
UF Games and Noble Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UF Games and Noble Financials
The main advantage of trading using opposite UF Games and Noble Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UF Games position performs unexpectedly, Noble Financials 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 Noble Financials will offset losses from the drop in Noble Financials' long position.| UF Games vs. CI Games SA | UF Games vs. Pixel Crow Games | UF Games vs. Skyline Investment SA | UF Games vs. SOFTWARE MANSION SPOLKA |
| Noble Financials vs. Mlk Foods Public | Noble Financials vs. Alior Bank SA | Noble Financials vs. Centrum Finansowe Banku | Noble Financials vs. SOFTWARE MANSION SPOLKA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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