Correlation Between ANGLER GAMING and AVITA Medical

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

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

Diversification Opportunities for ANGLER GAMING and AVITA Medical

-0.8

Correlation Coefficient

ANGLER GAMING  AVITA Medical

Pay attention - limited upside

The 3 months correlation between ANGLER and AVITA is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ANGLER GAMING PLC and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical and ANGLER 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 ANGLER GAMING PLC are associated (or correlated) with AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of ANGLER GAMING i.e., ANGLER GAMING and AVITA Medical go up and down completely randomly.

Pair Corralation between ANGLER GAMING and AVITA Medical

Assuming the 90 days horizon ANGLER GAMING PLC is expected to under-perform the AVITA Medical. In addition to that, ANGLER GAMING is 1.35 times more volatile than AVITA Medical. It trades about -0.11 of its total potential returns per unit of risk. AVITA Medical is currently generating about 0.14 per unit of volatility. If you would invest  220.00  in AVITA Medical on September 17, 2024 and sell it today you would earn a total of  18.00  from holding AVITA Medical or generate 8.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

ANGLER GAMING PLC  vs.  AVITA Medical

ANGLER GAMING PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLER GAMING PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AVITA Medical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AVITA Medical are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, AVITA Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANGLER GAMING and AVITA Medical

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

The idea behind ANGLER GAMING PLC and AVITA Medical 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.