Correlation Between MOVIE GAMES and Cheniere Energy

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

Diversification Opportunities for MOVIE GAMES and Cheniere Energy

-0.76

Correlation Coefficient

MOVIE GAMES  Cheniere Energy

Pay attention - limited upside

The 3 months correlation between MOVIE and Cheniere is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Cheniere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy 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 Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and Cheniere Energy go up and down completely randomly.

Pair Corralation between MOVIE GAMES and Cheniere Energy

Assuming the 90 days horizon MOVIE GAMES SA is expected to under-perform the Cheniere Energy. In addition to that, MOVIE GAMES is 2.18 times more volatile than Cheniere Energy. It trades about -0.01 of its total potential returns per unit of risk. Cheniere Energy is currently generating about 0.05 per unit of volatility. If you would invest  13,856  in Cheniere Energy on October 4, 2024 and sell it today you would earn a total of  6,214  from holding Cheniere Energy or generate 44.85% return on investment over 90 days.

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

MOVIE GAMES SA  vs.  Cheniere Energy

MOVIE GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOVIE GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Cheniere Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cheniere Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cheniere Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOVIE GAMES and Cheniere Energy

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

The idea behind MOVIE GAMES SA and Cheniere Energy 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.