Correlation Between True Games and SOFTWARE MANSION
Can any of the company-specific risk be diversified away by investing in both True Games and SOFTWARE MANSION 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 True Games and SOFTWARE MANSION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between True Games Syndicate and SOFTWARE MANSION SPOLKA, you can compare the effects of market volatilities on True Games and SOFTWARE MANSION 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 True Games with a short position of SOFTWARE MANSION. Check out your portfolio center. Please also check ongoing floating volatility patterns of True Games and SOFTWARE MANSION.
Diversification Opportunities for True Games and SOFTWARE MANSION
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between True and SOFTWARE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate and SOFTWARE MANSION SPOLKA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTWARE MANSION SPOLKA and True Games 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 True Games Syndicate are associated (or correlated) with SOFTWARE MANSION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTWARE MANSION SPOLKA has no effect on the direction of True Games i.e., True Games and SOFTWARE MANSION go up and down completely randomly.
Pair Corralation between True Games and SOFTWARE MANSION
Assuming the 90 days trading horizon True Games Syndicate is expected to generate 1.58 times more return on investment than SOFTWARE MANSION. However, True Games is 1.58 times more volatile than SOFTWARE MANSION SPOLKA. It trades about 0.05 of its potential returns per unit of risk. SOFTWARE MANSION SPOLKA is currently generating about 0.03 per unit of risk. If you would invest 27.00 in True Games Syndicate on September 11, 2024 and sell it today you would earn a total of 20.00 from holding True Games Syndicate or generate 74.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 59.13% |
Values | Daily Returns |
True Games Syndicate vs. SOFTWARE MANSION SPOLKA
Performance |
Timeline |
True Games Syndicate |
SOFTWARE MANSION SPOLKA |
True Games and SOFTWARE MANSION Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with True Games and SOFTWARE MANSION
The main advantage of trading using opposite True Games and SOFTWARE MANSION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if True Games position performs unexpectedly, SOFTWARE MANSION 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 SOFTWARE MANSION will offset losses from the drop in SOFTWARE MANSION's long position.True Games vs. Movie Games SA | True Games vs. Inter Cars SA | True Games vs. PMPG Polskie Media | True Games vs. Quantum Software 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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