Correlation Between MOVIE GAMES and Aluminumof China

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

Diversification Opportunities for MOVIE GAMES and Aluminumof China

0.72

Correlation Coefficient

MOVIE GAMES  Aluminumof China

Poor diversification

The 3 months correlation between MOVIE and Aluminumof is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and Aluminumof China go up and down completely randomly.

Pair Corralation between MOVIE GAMES and Aluminumof China

Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 1.39 times more return on investment than Aluminumof China. However, MOVIE GAMES is 1.39 times more volatile than Aluminum of. It trades about 0.15 of its potential returns per unit of risk. Aluminum of is currently generating about 0.11 per unit of risk. If you would invest  297.00  in MOVIE GAMES SA on December 21, 2024 and sell it today you would earn a total of  107.00  from holding MOVIE GAMES SA or generate 36.03% return on investment over 90 days.

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

MOVIE GAMES SA  vs.  Aluminum of

MOVIE GAMES SA

Risk-Adjusted Performance

Good

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

Aluminumof China

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aluminumof China reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOVIE GAMES and Aluminumof China

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

The idea behind MOVIE GAMES SA and Aluminum of 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.