Correlation Between MOVIE GAMES and LANSON-BCC INH

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

Diversification Opportunities for MOVIE GAMES and LANSON-BCC INH

0.36

Correlation Coefficient

MOVIE GAMES  LANSON-BCC INH

Weak diversification

The 3 months correlation between MOVIE and LANSON-BCC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and LANSON BCC INH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANSON BCC INH 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 LANSON-BCC INH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANSON BCC INH has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and LANSON-BCC INH go up and down completely randomly.

Pair Corralation between MOVIE GAMES and LANSON-BCC INH

Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 2.66 times more return on investment than LANSON-BCC INH. However, MOVIE GAMES is 2.66 times more volatile than LANSON BCC INH EO. It trades about 0.01 of its potential returns per unit of risk. LANSON BCC INH EO is currently generating about -0.01 per unit of risk. If you would invest  426.00  in MOVIE GAMES SA on October 22, 2024 and sell it today you would lose (51.00) from holding MOVIE GAMES SA or give up 11.97% of portfolio value over 90 days.

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

MOVIE GAMES SA  vs.  LANSON BCC INH EO

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 nearly stable basic indicators, MOVIE GAMES is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

LANSON BCC INH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LANSON BCC INH EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with MOVIE GAMES and LANSON-BCC INH

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

The idea behind MOVIE GAMES SA and LANSON BCC INH EO 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.