Correlation Between 3R Games and Immobile

Can any of the company-specific risk be diversified away by investing in both 3R Games and Immobile 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 3R Games and Immobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3R Games SA and Immobile, you can compare the effects of market volatilities on 3R Games and Immobile 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 3R Games with a short position of Immobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3R Games and Immobile.

Diversification Opportunities for 3R Games and Immobile

0.77

Correlation Coefficient

3R Games  Immobile

Poor diversification

The 3 months correlation between 3RG and Immobile is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding 3R Games SA and Immobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobile and 3R 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 3R Games SA are associated (or correlated) with Immobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobile has no effect on the direction of 3R Games i.e., 3R Games and Immobile go up and down completely randomly.

Pair Corralation between 3R Games and Immobile

Assuming the 90 days trading horizon 3R Games SA is expected to generate 1.61 times more return on investment than Immobile. However, 3R Games is 1.61 times more volatile than Immobile. It trades about 0.18 of its potential returns per unit of risk. Immobile is currently generating about 0.12 per unit of risk. If you would invest  36.00  in 3R Games SA on December 30, 2024 and sell it today you would earn a total of  24.00  from holding 3R Games SA or generate 66.67% return on investment over 90 days.

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

3R Games SA  vs.  Immobile

3R Games SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 3R Games SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, 3R Games reported solid returns over the last few months and may actually be approaching a breakup point.

Immobile

Risk-Adjusted Performance

OK

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

Pair Trading with 3R Games and Immobile

The main advantage of trading using opposite 3R Games and Immobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3R Games position performs unexpectedly, Immobile 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 Immobile will offset losses from the drop in Immobile's long position.

The idea behind 3R Games SA and Immobile 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.