Correlation Between GAMING FAC and Media

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

By analyzing existing cross correlation between GAMING FAC SA and Media and Games, you can compare the effects of market volatilities on GAMING FAC and Media 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 GAMING FAC with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and Media.

Diversification Opportunities for GAMING FAC and Media

-0.07

Correlation Coefficient

GAMING FAC  Media

Good diversification

The 3 months correlation between GAMING and Media is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of GAMING FAC i.e., GAMING FAC and Media go up and down completely randomly.

Pair Corralation between GAMING FAC and Media

Assuming the 90 days horizon GAMING FAC SA is expected to generate 0.51 times more return on investment than Media. However, GAMING FAC SA is 1.96 times less risky than Media. It trades about -0.23 of its potential returns per unit of risk. Media and Games is currently generating about -0.29 per unit of risk. If you would invest  171.00  in GAMING FAC SA on September 27, 2024 and sell it today you would lose (16.00) from holding GAMING FAC SA or give up 9.36% of portfolio value over 90 days.

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

GAMING FAC SA  vs.  Media and Games

GAMING FAC SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMING FAC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Media and Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with GAMING FAC and Media

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

The idea behind GAMING FAC SA and Media and Games 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.