Correlation Between Esotiq Henderson and Creativeforge Games

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

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

Diversification Opportunities for Esotiq Henderson and Creativeforge Games

-0.76

Correlation Coefficient

Esotiq Henderson  Creativeforge Games

Pay attention - limited upside

The 3 months correlation between Esotiq and Creativeforge is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Esotiq Henderson SA and Creativeforge Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creativeforge Games and Esotiq Henderson 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 Esotiq Henderson SA are associated (or correlated) with Creativeforge Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creativeforge Games has no effect on the direction of Esotiq Henderson i.e., Esotiq Henderson and Creativeforge Games go up and down completely randomly.

Pair Corralation between Esotiq Henderson and Creativeforge Games

Assuming the 90 days trading horizon Esotiq Henderson SA is expected to generate 0.58 times more return on investment than Creativeforge Games. However, Esotiq Henderson SA is 1.72 times less risky than Creativeforge Games. It trades about 0.0 of its potential returns per unit of risk. Creativeforge Games SA is currently generating about -0.11 per unit of risk. If you would invest  4,170  in Esotiq Henderson SA on September 2, 2024 and sell it today you would lose (150.00) from holding Esotiq Henderson SA or give up 3.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Esotiq Henderson SA  vs.  Creativeforge Games SA

Esotiq Henderson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esotiq Henderson SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Esotiq Henderson is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Creativeforge Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creativeforge 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.

Pair Trading with Esotiq Henderson and Creativeforge Games

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

The idea behind Esotiq Henderson SA and Creativeforge Games 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.