Correlation Between Pegatron Corp and Gamania Digital

Can any of the company-specific risk be diversified away by investing in both Pegatron Corp and Gamania Digital 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 Pegatron Corp and Gamania Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pegatron Corp and Gamania Digital Entertainment, you can compare the effects of market volatilities on Pegatron Corp and Gamania Digital 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 Pegatron Corp with a short position of Gamania Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegatron Corp and Gamania Digital.

Diversification Opportunities for Pegatron Corp and Gamania Digital

-0.83

Correlation Coefficient

Pegatron Corp  Gamania Digital

Pay attention - limited upside

The 3 months correlation between Pegatron and Gamania is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pegatron Corp and Gamania Digital Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamania Digital Ente and Pegatron Corp 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 Pegatron Corp are associated (or correlated) with Gamania Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamania Digital Ente has no effect on the direction of Pegatron Corp i.e., Pegatron Corp and Gamania Digital go up and down completely randomly.

Pair Corralation between Pegatron Corp and Gamania Digital

Assuming the 90 days trading horizon Pegatron Corp is expected to under-perform the Gamania Digital. But the stock apears to be less risky and, when comparing its historical volatility, Pegatron Corp is 1.03 times less risky than Gamania Digital. The stock trades about -0.05 of its potential returns per unit of risk. The Gamania Digital Entertainment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,870  in Gamania Digital Entertainment on September 14, 2024 and sell it today you would earn a total of  280.00  from holding Gamania Digital Entertainment or generate 3.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pegatron Corp  vs.  Gamania Digital Entertainment

Pegatron Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gamania Digital Ente

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gamania Digital Entertainment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Gamania Digital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Pegatron Corp and Gamania Digital

The main advantage of trading using opposite Pegatron Corp and Gamania Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pegatron Corp position performs unexpectedly, Gamania Digital 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 Gamania Digital will offset losses from the drop in Gamania Digital's long position.

The idea behind Pegatron Corp and Gamania Digital Entertainment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.