Correlation Between Fun Yours and Gamania Digital

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

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

Diversification Opportunities for Fun Yours and Gamania Digital

-0.15

Correlation Coefficient

Fun Yours  Gamania Digital

Good diversification

The 3 months correlation between Fun and Gamania is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fun Yours Technology 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 Fun Yours 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 Fun Yours Technology 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 Fun Yours i.e., Fun Yours and Gamania Digital go up and down completely randomly.

Pair Corralation between Fun Yours and Gamania Digital

Assuming the 90 days trading horizon Fun Yours Technology is expected to under-perform the Gamania Digital. In addition to that, Fun Yours is 1.16 times more volatile than Gamania Digital Entertainment. It trades about -0.03 of its total potential returns per unit of risk. Gamania Digital Entertainment is currently generating about 0.12 per unit of volatility. If you would invest  7,880  in Gamania Digital Entertainment on September 2, 2024 and sell it today you would earn a total of  760.00  from holding Gamania Digital Entertainment or generate 9.64% return on investment over 90 days.

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

Fun Yours Technology  vs.  Gamania Digital Entertainment

Fun Yours Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fun Yours Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Fun Yours 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

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gamania Digital Entertainment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gamania Digital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fun Yours and Gamania Digital

The main advantage of trading using opposite Fun Yours and Gamania Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fun Yours 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 Fun Yours Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.