Correlation Between Champion Gaming and Brookfield

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

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

Diversification Opportunities for Champion Gaming and Brookfield

0.0

Correlation Coefficient

Champion Gaming  Brookfield

Pay attention - limited upside

The 3 months correlation between Champion and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Champion Gaming Group and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Champion Gaming 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 Champion Gaming Group are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Champion Gaming i.e., Champion Gaming and Brookfield go up and down completely randomly.

Pair Corralation between Champion Gaming and Brookfield

Assuming the 90 days trading horizon Champion Gaming Group is expected to generate 11.85 times more return on investment than Brookfield. However, Champion Gaming is 11.85 times more volatile than Brookfield. It trades about 0.0 of its potential returns per unit of risk. Brookfield is currently generating about 0.04 per unit of risk. If you would invest  8.00  in Champion Gaming Group on September 26, 2024 and sell it today you would lose (7.00) from holding Champion Gaming Group or give up 87.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Champion Gaming Group  vs.  Brookfield

Champion Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champion Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Champion Gaming is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Brookfield

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Brookfield may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Champion Gaming and Brookfield

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

The idea behind Champion Gaming Group and Brookfield 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.