Correlation Between Contagious Gaming and John Wiley

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

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

Diversification Opportunities for Contagious Gaming and John Wiley

0.0

Correlation Coefficient

Contagious Gaming  John Wiley

Pay attention - limited upside

The 3 months correlation between Contagious and John is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Contagious Gaming and John Wiley Sons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wiley Sons and Contagious 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 Contagious Gaming are associated (or correlated) with John Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wiley Sons has no effect on the direction of Contagious Gaming i.e., Contagious Gaming and John Wiley go up and down completely randomly.

Pair Corralation between Contagious Gaming and John Wiley

If you would invest  4,607  in John Wiley Sons on September 14, 2024 and sell it today you would lose (22.00) from holding John Wiley Sons or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	78.13%
Values	Daily Returns

Contagious Gaming  vs.  John Wiley Sons

Contagious Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Contagious Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Contagious Gaming is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

John Wiley Sons

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days John Wiley Sons has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, John Wiley is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Contagious Gaming and John Wiley

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

The idea behind Contagious Gaming and John Wiley Sons 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.