Correlation Between UF Games and Live Motion
Can any of the company-specific risk be diversified away by investing in both UF Games and Live Motion 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 Live Motion 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 Live Motion Games, you can compare the effects of market volatilities on UF Games and Live Motion 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 Live Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and Live Motion.
Diversification Opportunities for UF Games and Live Motion
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UFG and Live is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and Live Motion Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Motion Games 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 Live Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Motion Games has no effect on the direction of UF Games i.e., UF Games and Live Motion go up and down completely randomly.
Pair Corralation between UF Games and Live Motion
Assuming the 90 days trading horizon UF Games SA is expected to generate 0.5 times more return on investment than Live Motion. However, UF Games SA is 2.01 times less risky than Live Motion. It trades about -0.05 of its potential returns per unit of risk. Live Motion Games is currently generating about -0.05 per unit of risk. If you would invest 187.00 in UF Games SA on August 31, 2024 and sell it today you would lose (78.00) from holding UF Games SA or give up 41.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.93% |
| Values | Daily Returns |
UF Games SA vs. Live Motion Games
Performance |
| Timeline |
| UF Games SA |
| Live Motion Games |
UF Games and Live Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UF Games and Live Motion
The main advantage of trading using opposite UF Games and Live Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UF Games position performs unexpectedly, Live Motion 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 Live Motion will offset losses from the drop in Live Motion's long position.| UF Games vs. Banco Santander SA | UF Games vs. UniCredit SpA | UF Games vs. CEZ as | UF Games vs. Polski Koncern Naftowy |
| Live Motion vs. ECC Games SA | Live Motion vs. Asseco Business Solutions | Live Motion vs. Detalion Games SA | Live Motion vs. Asseco South Eastern |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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