Correlation Between GAMEVIL and Wemade CoLtd

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

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

Diversification Opportunities for GAMEVIL and Wemade CoLtd

0.65

Correlation Coefficient

GAMEVIL  Wemade CoLtd

Poor diversification

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

Pair Corralation between GAMEVIL and Wemade CoLtd

Assuming the 90 days trading horizon GAMEVIL is expected to generate 1.45 times more return on investment than Wemade CoLtd. However, GAMEVIL is 1.45 times more volatile than Wemade CoLtd. It trades about 0.11 of its potential returns per unit of risk. Wemade CoLtd is currently generating about 0.16 per unit of risk. If you would invest  2,375,000  in GAMEVIL on August 30, 2024 and sell it today you would earn a total of  805,000  from holding GAMEVIL or generate 33.89% return on investment over 90 days.

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

GAMEVIL  vs.  Wemade CoLtd

GAMEVIL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GAMEVIL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GAMEVIL sustained solid returns over the last few months and may actually be approaching a breakup point.

Wemade CoLtd

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wemade CoLtd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wemade CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMEVIL and Wemade CoLtd

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

The idea behind GAMEVIL and Wemade CoLtd 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.