Correlation Between UPS CDR and Contagious Gaming

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both UPS CDR and Contagious Gaming 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 UPS CDR and Contagious Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UPS CDR and Contagious Gaming, you can compare the effects of market volatilities on UPS CDR and Contagious Gaming 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 UPS CDR with a short position of Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPS CDR and Contagious Gaming.

Diversification Opportunities for UPS CDR and Contagious Gaming

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between UPS and Contagious is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UPS CDR and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming and UPS CDR 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 UPS CDR are associated (or correlated) with Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of UPS CDR i.e., UPS CDR and Contagious Gaming go up and down completely randomly.

Pair Corralation between UPS CDR and Contagious Gaming

Assuming the 90 days trading horizon UPS CDR is expected to under-perform the Contagious Gaming. But the stock apears to be less risky and, when comparing its historical volatility, UPS CDR is 4.65 times less risky than Contagious Gaming. The stock trades about -0.02 of its potential returns per unit of risk. The Contagious Gaming is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Contagious Gaming on September 10, 2024 and sell it today you would earn a total of  0.00  from holding Contagious Gaming or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

UPS CDR  vs.  Contagious Gaming

 Performance 
       Timeline  
UPS CDR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days UPS CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, UPS CDR is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Contagious Gaming 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Contagious Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Contagious Gaming is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

UPS CDR and Contagious Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with UPS CDR and Contagious Gaming

The main advantage of trading using opposite UPS CDR and Contagious Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPS CDR position performs unexpectedly, Contagious Gaming 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 Contagious Gaming will offset losses from the drop in Contagious Gaming's long position.
The idea behind UPS CDR and Contagious Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities