Correlation Between Live Motion and MW Trade
Can any of the company-specific risk be diversified away by investing in both Live Motion and MW Trade 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 Live Motion and MW Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Motion Games and MW Trade SA, you can compare the effects of market volatilities on Live Motion and MW Trade 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 Live Motion with a short position of MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Motion and MW Trade.
Diversification Opportunities for Live Motion and MW Trade
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Live and MWT is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Live Motion Games and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade SA and Live Motion 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 Live Motion Games are associated (or correlated) with MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Live Motion i.e., Live Motion and MW Trade go up and down completely randomly.
Pair Corralation between Live Motion and MW Trade
Assuming the 90 days trading horizon Live Motion Games is expected to under-perform the MW Trade. In addition to that, Live Motion is 1.25 times more volatile than MW Trade SA. It trades about -0.3 of its total potential returns per unit of risk. MW Trade SA is currently generating about -0.2 per unit of volatility. If you would invest 480.00 in MW Trade SA on September 10, 2024 and sell it today you would lose (162.00) from holding MW Trade SA or give up 33.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 92.06% |
Values | Daily Returns |
Live Motion Games vs. MW Trade SA
Performance |
Timeline |
Live Motion Games |
MW Trade SA |
Live Motion and MW Trade Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Live Motion and MW Trade
The main advantage of trading using opposite Live Motion and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Motion position performs unexpectedly, MW Trade 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 MW Trade will offset losses from the drop in MW Trade's long position.Live Motion vs. Ice Code Games | Live Motion vs. Gamedust SA | Live Motion vs. 3R Games SA | Live Motion vs. Baked Games SA |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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