Correlation Between Newretail and Ibase Gaming

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

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

Diversification Opportunities for Newretail and Ibase Gaming

-0.17

Correlation Coefficient

Newretail  Ibase Gaming

Good diversification

The 3 months correlation between Newretail and Ibase is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Ibase Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibase Gaming and Newretail 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 Newretail Co are associated (or correlated) with Ibase Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibase Gaming has no effect on the direction of Newretail i.e., Newretail and Ibase Gaming go up and down completely randomly.

Pair Corralation between Newretail and Ibase Gaming

Assuming the 90 days trading horizon Newretail Co is expected to under-perform the Ibase Gaming. In addition to that, Newretail is 1.51 times more volatile than Ibase Gaming. It trades about -0.05 of its total potential returns per unit of risk. Ibase Gaming is currently generating about -0.03 per unit of volatility. If you would invest  3,525  in Ibase Gaming on December 24, 2024 and sell it today you would lose (165.00) from holding Ibase Gaming or give up 4.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

Newretail Co  vs.  Ibase Gaming

Newretail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newretail Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Ibase Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ibase Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ibase Gaming is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Newretail and Ibase Gaming

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

The idea behind Newretail Co and Ibase Gaming 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.