Correlation Between Kambi Group and World Poker

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

By analyzing existing cross correlation between Kambi Group plc and World Poker Fund, you can compare the effects of market volatilities on Kambi Group and World Poker 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 Kambi Group with a short position of World Poker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kambi Group and World Poker.

Diversification Opportunities for Kambi Group and World Poker

0.53

Correlation Coefficient

Kambi Group  World Poker

Very weak diversification

The 3 months correlation between Kambi and World is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group plc and World Poker Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Poker Fund and Kambi Group 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 Kambi Group plc are associated (or correlated) with World Poker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Poker Fund has no effect on the direction of Kambi Group i.e., Kambi Group and World Poker go up and down completely randomly.

Pair Corralation between Kambi Group and World Poker

Assuming the 90 days horizon Kambi Group plc is expected to generate 0.2 times more return on investment than World Poker. However, Kambi Group plc is 4.95 times less risky than World Poker. It trades about -0.13 of its potential returns per unit of risk. World Poker Fund is currently generating about -0.04 per unit of risk. If you would invest  1,255  in Kambi Group plc on September 26, 2024 and sell it today you would lose (297.00) from holding Kambi Group plc or give up 23.67% of portfolio value over 90 days.

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

Kambi Group plc  vs.  World Poker Fund

Kambi Group plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kambi Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

World Poker Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Poker Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kambi Group and World Poker

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

The idea behind Kambi Group plc and World Poker Fund 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.