Correlation Between Gaming and SOGECLAIR

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

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

Diversification Opportunities for Gaming and SOGECLAIR

0.24

Correlation Coefficient

Gaming  SOGECLAIR

Modest diversification

The 3 months correlation between Gaming and SOGECLAIR is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH and 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 Gaming and Leisure are associated (or correlated) with SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of Gaming i.e., Gaming and SOGECLAIR go up and down completely randomly.

Pair Corralation between Gaming and SOGECLAIR

Assuming the 90 days horizon Gaming is expected to generate 7.74 times less return on investment than SOGECLAIR. But when comparing it to its historical volatility, Gaming and Leisure is 2.83 times less risky than SOGECLAIR. It trades about 0.05 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,740  in SOGECLAIR SA INH on December 21, 2024 and sell it today you would earn a total of  600.00  from holding SOGECLAIR SA INH or generate 34.48% return on investment over 90 days.

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

Gaming and Leisure  vs.  SOGECLAIR SA INH

Gaming and Leisure

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming and Leisure are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gaming is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SOGECLAIR SA INH

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SOGECLAIR SA INH are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOGECLAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gaming and SOGECLAIR

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

The idea behind Gaming and Leisure and SOGECLAIR SA INH 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.