Correlation Between Sportsoul and Invengo Information

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

By analyzing existing cross correlation between Sportsoul Co Ltd and Invengo Information Technology, you can compare the effects of market volatilities on Sportsoul and Invengo Information 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 Sportsoul with a short position of Invengo Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsoul and Invengo Information.

Diversification Opportunities for Sportsoul and Invengo Information

0.72

Correlation Coefficient

Sportsoul  Invengo Information

Poor diversification

The 3 months correlation between Sportsoul and Invengo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sportsoul Co Ltd and Invengo Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invengo Information and Sportsoul 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 Sportsoul Co Ltd are associated (or correlated) with Invengo Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invengo Information has no effect on the direction of Sportsoul i.e., Sportsoul and Invengo Information go up and down completely randomly.

Pair Corralation between Sportsoul and Invengo Information

Assuming the 90 days trading horizon Sportsoul Co Ltd is expected to under-perform the Invengo Information. But the stock apears to be less risky and, when comparing its historical volatility, Sportsoul Co Ltd is 1.08 times less risky than Invengo Information. The stock trades about -0.32 of its potential returns per unit of risk. The Invengo Information Technology is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  631.00  in Invengo Information Technology on October 8, 2024 and sell it today you would lose (120.00) from holding Invengo Information Technology or give up 19.02% of portfolio value over 90 days.

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

Sportsoul Co Ltd  vs.  Invengo Information Technology

Sportsoul

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sportsoul Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Invengo Information

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invengo Information Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Invengo Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sportsoul and Invengo Information

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

The idea behind Sportsoul Co Ltd and Invengo Information Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.