Correlation Between MOVIE GAMES and Neinor Homes

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

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

Diversification Opportunities for MOVIE GAMES and Neinor Homes

0.27

Correlation Coefficient

MOVIE GAMES  Neinor Homes

Modest diversification

The 3 months correlation between MOVIE and Neinor is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and Neinor Homes go up and down completely randomly.

Pair Corralation between MOVIE GAMES and Neinor Homes

Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 1.45 times more return on investment than Neinor Homes. However, MOVIE GAMES is 1.45 times more volatile than Neinor Homes SA. It trades about 0.05 of its potential returns per unit of risk. Neinor Homes SA is currently generating about -0.05 per unit of risk. If you would invest  366.00  in MOVIE GAMES SA on December 29, 2024 and sell it today you would earn a total of  23.00  from holding MOVIE GAMES SA or generate 6.28% return on investment over 90 days.

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

MOVIE GAMES SA  vs.  Neinor Homes SA

MOVIE GAMES SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOVIE GAMES SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOVIE GAMES may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Neinor Homes SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neinor Homes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MOVIE GAMES and Neinor Homes

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

The idea behind MOVIE GAMES SA and Neinor Homes SA 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.