Correlation Between ANGLER GAMING and Carsales

Can any of the company-specific risk be diversified away by investing in both ANGLER GAMING and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on ANGLER GAMING and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLER GAMING and Carsales.

Diversification Opportunities for ANGLER GAMING and Carsales

-0.41

Correlation Coefficient

ANGLER GAMING  Carsales

Very good diversification

The 3 months correlation between ANGLER and Carsales is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ANGLER GAMING PLC and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of ANGLER GAMING i.e., ANGLER GAMING and Carsales go up and down completely randomly.

Pair Corralation between ANGLER GAMING and Carsales

Assuming the 90 days horizon ANGLER GAMING PLC is expected to generate 3.14 times more return on investment than Carsales. However, ANGLER GAMING is 3.14 times more volatile than Carsales. It trades about -0.07 of its potential returns per unit of risk. Carsales is currently generating about -0.43 per unit of risk. If you would invest  29.00  in ANGLER GAMING PLC on September 22, 2024 and sell it today you would lose (2.00) from holding ANGLER GAMING PLC or give up 6.9% of portfolio value over 90 days.

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

ANGLER GAMING PLC  vs.  Carsales

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.

Carsales

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carsales has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Carsales is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ANGLER GAMING and Carsales

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

The idea behind ANGLER GAMING PLC and Carsales 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.