Correlation Between GAMING FAC and PATRICK INDUSTR

Can any of the company-specific risk be diversified away by investing in both GAMING FAC and PATRICK INDUSTR 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 PATRICK INDUSTR 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 PATRICK INDUSTR, you can compare the effects of market volatilities on GAMING FAC and PATRICK INDUSTR 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 PATRICK INDUSTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and PATRICK INDUSTR.

Diversification Opportunities for GAMING FAC and PATRICK INDUSTR

0.12

Correlation Coefficient

GAMING FAC  PATRICK INDUSTR

Average diversification

The 3 months correlation between GAMING and PATRICK is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and PATRICK INDUSTR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATRICK INDUSTR 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 PATRICK INDUSTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATRICK INDUSTR has no effect on the direction of GAMING FAC i.e., GAMING FAC and PATRICK INDUSTR go up and down completely randomly.

Pair Corralation between GAMING FAC and PATRICK INDUSTR

Assuming the 90 days horizon GAMING FAC SA is expected to under-perform the PATRICK INDUSTR. In addition to that, GAMING FAC is 1.54 times more volatile than PATRICK INDUSTR. It trades about -0.07 of its total potential returns per unit of risk. PATRICK INDUSTR is currently generating about -0.03 per unit of volatility. If you would invest  8,361  in PATRICK INDUSTR on September 26, 2024 and sell it today you would lose (461.00) from holding PATRICK INDUSTR or give up 5.51% of portfolio value over 90 days.

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

GAMING FAC SA  vs.  PATRICK INDUSTR

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PATRICK INDUSTR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PATRICK INDUSTR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PATRICK INDUSTR is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GAMING FAC and PATRICK INDUSTR

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

The idea behind GAMING FAC SA and PATRICK INDUSTR 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.