Correlation Between UF Games and NGG
Can any of the company-specific risk be diversified away by investing in both UF Games and NGG 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 NGG 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 NGG, you can compare the effects of market volatilities on UF Games and NGG 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 NGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and NGG.
Diversification Opportunities for UF Games and NGG
Very poor diversification
The 3 months correlation between UFG and NGG is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and NGG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGG 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 NGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGG has no effect on the direction of UF Games i.e., UF Games and NGG go up and down completely randomly.
Pair Corralation between UF Games and NGG
Assuming the 90 days trading horizon UF Games SA is expected to generate 0.37 times more return on investment than NGG. However, UF Games SA is 2.71 times less risky than NGG. It trades about 0.66 of its potential returns per unit of risk. NGG is currently generating about 0.19 per unit of risk. If you would invest 89.00 in UF Games SA on October 26, 2024 and sell it today you would earn a total of 21.00 from holding UF Games SA or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 70.59% |
| Values | Daily Returns |
UF Games SA vs. NGG
Performance |
| Timeline |
| UF Games SA |
| NGG |
UF Games and NGG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UF Games and NGG
The main advantage of trading using opposite UF Games and NGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UF Games position performs unexpectedly, NGG 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 NGG will offset losses from the drop in NGG'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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