Correlation Between Guild Esports and Genius Brands

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

By analyzing existing cross correlation between Guild Esports Plc and Genius Brands International, you can compare the effects of market volatilities on Guild Esports and Genius Brands 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 Guild Esports with a short position of Genius Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Esports and Genius Brands.

Diversification Opportunities for Guild Esports and Genius Brands

-0.42

Correlation Coefficient

Guild Esports  Genius Brands

Very good diversification

The 3 months correlation between Guild and Genius is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guild Esports Plc and Genius Brands International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Brands Intern and Guild Esports 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 Guild Esports Plc are associated (or correlated) with Genius Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Brands Intern has no effect on the direction of Guild Esports i.e., Guild Esports and Genius Brands go up and down completely randomly.

Pair Corralation between Guild Esports and Genius Brands

If you would invest  0.27  in Guild Esports Plc on September 12, 2024 and sell it today you would lose (0.20) from holding Guild Esports Plc or give up 74.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Guild Esports Plc  vs.  Genius Brands International

Guild Esports Plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guild Esports Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, Guild Esports reported solid returns over the last few months and may actually be approaching a breakup point.

Genius Brands Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genius Brands International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Genius Brands is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guild Esports and Genius Brands

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

The idea behind Guild Esports Plc and Genius Brands International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.