Correlation Between Activision Blizzard and Motorsport Gaming

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

By analyzing existing cross correlation between Activision Blizzard and Motorsport Gaming Us, you can compare the effects of market volatilities on Activision Blizzard and Motorsport 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 Activision Blizzard with a short position of Motorsport Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Activision Blizzard and Motorsport Gaming.

Diversification Opportunities for Activision Blizzard and Motorsport Gaming

-0.27

Correlation Coefficient

Activision Blizzard  Motorsport Gaming

Very good diversification

The 3 months correlation between Activision and Motorsport is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Activision Blizzard and Motorsport Gaming Us in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorsport Gaming and Activision Blizzard 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 Activision Blizzard are associated (or correlated) with Motorsport Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorsport Gaming has no effect on the direction of Activision Blizzard i.e., Activision Blizzard and Motorsport Gaming go up and down completely randomly.

Pair Corralation between Activision Blizzard and Motorsport Gaming

If you would invest  132.00  in Motorsport Gaming Us on September 4, 2024 and sell it today you would earn a total of  4.00  from holding Motorsport Gaming Us or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Activision Blizzard  vs.  Motorsport Gaming Us

Activision Blizzard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Activision Blizzard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Activision Blizzard is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Motorsport Gaming

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Motorsport Gaming Us are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Motorsport Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Activision Blizzard and Motorsport Gaming

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

The idea behind Activision Blizzard and Motorsport Gaming Us 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .