Correlation Between Glodon Software and 37 Interactive

Can any of the company-specific risk be diversified away by investing in both Glodon Software and 37 Interactive 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 Glodon Software and 37 Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glodon Software Co and 37 Interactive Entertainment, you can compare the effects of market volatilities on Glodon Software and 37 Interactive 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 Glodon Software with a short position of 37 Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glodon Software and 37 Interactive.

Diversification Opportunities for Glodon Software and 37 Interactive

0.65

Correlation Coefficient

Glodon Software  37 Interactive

Poor diversification

The 3 months correlation between Glodon and 002555 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Glodon Software Co and 37 Interactive Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 37 Interactive Enter and Glodon Software 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 Glodon Software Co are associated (or correlated) with 37 Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 37 Interactive Enter has no effect on the direction of Glodon Software i.e., Glodon Software and 37 Interactive go up and down completely randomly.

Pair Corralation between Glodon Software and 37 Interactive

Assuming the 90 days trading horizon Glodon Software Co is expected to generate 1.3 times more return on investment than 37 Interactive. However, Glodon Software is 1.3 times more volatile than 37 Interactive Entertainment. It trades about 0.08 of its potential returns per unit of risk. 37 Interactive Entertainment is currently generating about 0.09 per unit of risk. If you would invest  913.00  in Glodon Software Co on October 2, 2024 and sell it today you would earn a total of  313.00  from holding Glodon Software Co or generate 34.28% return on investment over 90 days.

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

Glodon Software Co  vs.  37 Interactive Entertainment

Glodon Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glodon Software Co 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

37 Interactive Enter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 37 Interactive Entertainment 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Glodon Software and 37 Interactive

The main advantage of trading using opposite Glodon Software and 37 Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glodon Software position performs unexpectedly, 37 Interactive 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 37 Interactive will offset losses from the drop in 37 Interactive's long position.

The idea behind Glodon Software Co and 37 Interactive Entertainment 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.