Correlation Between Monnari Trade and Gaming Factory

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

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

Diversification Opportunities for Monnari Trade and Gaming Factory

-0.19

Correlation Coefficient

Monnari Trade  Gaming Factory

Good diversification

The 3 months correlation between Monnari and Gaming is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Monnari Trade 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 Monnari Trade 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 Monnari Trade 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 Monnari Trade i.e., Monnari Trade and Gaming Factory go up and down completely randomly.

Pair Corralation between Monnari Trade and Gaming Factory

Assuming the 90 days trading horizon Monnari Trade SA is expected to generate 0.5 times more return on investment than Gaming Factory. However, Monnari Trade SA is 2.0 times less risky than Gaming Factory. It trades about 0.0 of its potential returns per unit of risk. Gaming Factory SA is currently generating about -0.09 per unit of risk. If you would invest  518.00  in Monnari Trade SA on September 14, 2024 and sell it today you would lose (8.00) from holding Monnari Trade SA or give up 1.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Monnari Trade SA  vs.  Gaming Factory SA

Monnari Trade SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monnari Trade SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Monnari Trade is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Gaming Factory SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaming Factory SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Monnari Trade and Gaming Factory

The main advantage of trading using opposite Monnari Trade and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monnari Trade 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.

The idea behind Monnari Trade SA and Gaming Factory SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..