Correlation Between LSI Software and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both LSI Software and Gaming Factory 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 LSI Software and Gaming Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LSI Software SA and Gaming Factory SA, you can compare the effects of market volatilities on LSI Software and Gaming Factory 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 LSI Software with a short position of Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Software and Gaming Factory.
Diversification Opportunities for LSI Software and Gaming Factory
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between LSI and Gaming is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LSI Software SA and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory SA and LSI Software 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 LSI Software SA are associated (or correlated) with Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of LSI Software i.e., LSI Software and Gaming Factory go up and down completely randomly.
Pair Corralation between LSI Software and Gaming Factory
Assuming the 90 days trading horizon LSI Software is expected to generate 1.02 times less return on investment than Gaming Factory. But when comparing it to its historical volatility, LSI Software SA is 1.61 times less risky than Gaming Factory. It trades about 0.05 of its potential returns per unit of risk. Gaming Factory SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 576.00 in Gaming Factory SA on September 8, 2024 and sell it today you would earn a total of 144.00 from holding Gaming Factory SA or generate 25.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.79% |
Values | Daily Returns |
LSI Software SA vs. Gaming Factory SA
Performance |
Timeline |
LSI Software SA |
Gaming Factory SA |
LSI Software and Gaming Factory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LSI Software and Gaming Factory
The main advantage of trading using opposite LSI Software and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Software position performs unexpectedly, Gaming Factory 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 Gaming Factory will offset losses from the drop in Gaming Factory's long position.LSI Software vs. UniCredit SpA | LSI Software vs. Medicofarma Biotech SA | LSI Software vs. Skyline Investment SA | LSI Software vs. Cloud Technologies SA |
Gaming Factory vs. GreenX Metals | Gaming Factory vs. Enter Air SA | Gaming Factory vs. Detalion Games SA | Gaming Factory vs. Play2Chill SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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