Correlation Between Homecast CoLtd and DoubleU Games

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

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

Diversification Opportunities for Homecast CoLtd and DoubleU Games

-0.46

Correlation Coefficient

Homecast CoLtd  DoubleU Games

Very good diversification

The 3 months correlation between Homecast and DoubleU is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and DoubleU Games Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleU Games and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with DoubleU Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleU Games has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and DoubleU Games go up and down completely randomly.

Pair Corralation between Homecast CoLtd and DoubleU Games

Assuming the 90 days trading horizon Homecast CoLtd is expected to generate 1.71 times more return on investment than DoubleU Games. However, Homecast CoLtd is 1.71 times more volatile than DoubleU Games Co. It trades about 0.03 of its potential returns per unit of risk. DoubleU Games Co is currently generating about 0.0 per unit of risk. If you would invest  221,000  in Homecast CoLtd on October 10, 2024 and sell it today you would earn a total of  2,000  from holding Homecast CoLtd or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Homecast CoLtd  vs.  DoubleU Games Co

Homecast CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Homecast CoLtd 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.

DoubleU Games

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleU Games Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, DoubleU Games is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Homecast CoLtd and DoubleU Games

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

The idea behind Homecast CoLtd and DoubleU Games Co 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.