Correlation Between Roblox Corp and GameOn Entertainment

Can any of the company-specific risk be diversified away by investing in both Roblox Corp and GameOn Entertainment 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 Roblox Corp and GameOn Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Roblox Corp and GameOn Entertainment Technologies, you can compare the effects of market volatilities on Roblox Corp and GameOn Entertainment 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 Roblox Corp with a short position of GameOn Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roblox Corp and GameOn Entertainment.

Diversification Opportunities for Roblox Corp and GameOn Entertainment

-0.73

Correlation Coefficient

Roblox Corp  GameOn Entertainment

Pay attention - limited upside

The 3 months correlation between Roblox and GameOn is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Roblox Corp and GameOn Entertainment Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameOn Entertainment and Roblox Corp 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 Roblox Corp are associated (or correlated) with GameOn Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameOn Entertainment has no effect on the direction of Roblox Corp i.e., Roblox Corp and GameOn Entertainment go up and down completely randomly.

Pair Corralation between Roblox Corp and GameOn Entertainment

Given the investment horizon of 90 days Roblox Corp is expected to generate 0.15 times more return on investment than GameOn Entertainment. However, Roblox Corp is 6.71 times less risky than GameOn Entertainment. It trades about 0.14 of its potential returns per unit of risk. GameOn Entertainment Technologies is currently generating about -0.02 per unit of risk. If you would invest  4,541  in Roblox Corp on September 12, 2024 and sell it today you would earn a total of  1,448  from holding Roblox Corp or generate 31.89% return on investment over 90 days.

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

Roblox Corp  vs.  GameOn Entertainment Technolog

Roblox Corp

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roblox Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Roblox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

GameOn Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GameOn Entertainment Technologies 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 basic 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.

Pair Trading with Roblox Corp and GameOn Entertainment

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

The idea behind Roblox Corp and GameOn Entertainment Technologies 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.