Correlation Between Nexters Warrant and GameSquare Holdings

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

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

Diversification Opportunities for Nexters Warrant and GameSquare Holdings

0.15

Correlation Coefficient

Nexters Warrant  GameSquare Holdings

Average diversification

The 3 months correlation between Nexters and GameSquare is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nexters Warrant and GameSquare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameSquare Holdings and Nexters Warrant 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 Nexters Warrant are associated (or correlated) with GameSquare Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameSquare Holdings has no effect on the direction of Nexters Warrant i.e., Nexters Warrant and GameSquare Holdings go up and down completely randomly.

Pair Corralation between Nexters Warrant and GameSquare Holdings

Assuming the 90 days horizon Nexters Warrant is expected to under-perform the GameSquare Holdings. In addition to that, Nexters Warrant is 2.53 times more volatile than GameSquare Holdings. It trades about -0.24 of its total potential returns per unit of risk. GameSquare Holdings is currently generating about 0.1 per unit of volatility. If you would invest  77.00  in GameSquare Holdings on September 5, 2024 and sell it today you would earn a total of  8.00  from holding GameSquare Holdings or generate 10.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	59.09%
Values	Daily Returns

Nexters Warrant  vs.  GameSquare Holdings

Nexters Warrant

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nexters Warrant are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nexters Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

GameSquare Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GameSquare Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, GameSquare Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nexters Warrant and GameSquare Holdings

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

The idea behind Nexters Warrant and GameSquare Holdings 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 .