Correlation Between B Gaming and Rigolleau

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

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

Diversification Opportunities for B Gaming and Rigolleau

0.27

Correlation Coefficient

B Gaming  Rigolleau

Modest diversification

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

Pair Corralation between B Gaming and Rigolleau

Assuming the 90 days trading horizon B Gaming SA is expected to generate 54.09 times more return on investment than Rigolleau. However, B Gaming is 54.09 times more volatile than Rigolleau SA. It trades about 0.13 of its potential returns per unit of risk. Rigolleau SA is currently generating about 0.11 per unit of risk. If you would invest  1,550  in B Gaming SA on September 16, 2024 and sell it today you would earn a total of  17,425  from holding B Gaming SA or generate 1124.19% return on investment over 90 days.

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

B Gaming SA  vs.  Rigolleau SA

B Gaming SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in B Gaming SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, B Gaming sustained solid returns over the last few months and may actually be approaching a breakup point.

Rigolleau SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rigolleau SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rigolleau sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with B Gaming and Rigolleau

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

The idea behind B Gaming SA and Rigolleau 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.