Correlation Between Detalion Games and Novita SA

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

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

Diversification Opportunities for Detalion Games and Novita SA

-0.86

Correlation Coefficient

Detalion Games  Novita SA

Pay attention - limited upside

The 3 months correlation between Detalion and Novita is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Detalion Games SA and Novita SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novita SA and Detalion Games 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 Detalion Games SA are associated (or correlated) with Novita SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novita SA has no effect on the direction of Detalion Games i.e., Detalion Games and Novita SA go up and down completely randomly.

Pair Corralation between Detalion Games and Novita SA

Assuming the 90 days trading horizon Detalion Games SA is expected to under-perform the Novita SA. In addition to that, Detalion Games is 2.84 times more volatile than Novita SA. It trades about -0.24 of its total potential returns per unit of risk. Novita SA is currently generating about 0.14 per unit of volatility. If you would invest  11,000  in Novita SA on September 12, 2024 and sell it today you would earn a total of  1,500  from holding Novita SA or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	61.29%
Values	Daily Returns

Detalion Games SA  vs.  Novita SA

Detalion Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Detalion Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Novita SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Novita SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Novita SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Detalion Games and Novita SA

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

The idea behind Detalion Games SA and Novita SA 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.