Correlation Between 4Mass SA and 11 Bit

Can any of the company-specific risk be diversified away by investing in both 4Mass SA and 11 Bit 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 4Mass SA and 11 Bit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 4Mass SA and 11 bit studios, you can compare the effects of market volatilities on 4Mass SA and 11 Bit 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 4Mass SA with a short position of 11 Bit. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Mass SA and 11 Bit.

Diversification Opportunities for 4Mass SA and 11 Bit

-0.6

Correlation Coefficient

4Mass SA  11 Bit

Excellent diversification

The 3 months correlation between 4Mass and 11B is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding 4Mass SA and 11 bit studios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 11 bit studios and 4Mass SA 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 4Mass SA are associated (or correlated) with 11 Bit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 11 bit studios has no effect on the direction of 4Mass SA i.e., 4Mass SA and 11 Bit go up and down completely randomly.

Pair Corralation between 4Mass SA and 11 Bit

Assuming the 90 days trading horizon 4Mass SA is expected to generate 781.5 times less return on investment than 11 Bit. But when comparing it to its historical volatility, 4Mass SA is 1.53 times less risky than 11 Bit. It trades about 0.0 of its potential returns per unit of risk. 11 bit studios is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  17,020  in 11 bit studios on December 29, 2024 and sell it today you would earn a total of  3,180  from holding 11 bit studios or generate 18.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

4Mass SA  vs.  11 bit studios

4Mass SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days 4Mass SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, 4Mass SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

11 bit studios

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 11 bit studios are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, 11 Bit reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 4Mass SA and 11 Bit

The main advantage of trading using opposite 4Mass SA and 11 Bit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Mass SA position performs unexpectedly, 11 Bit 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 11 Bit will offset losses from the drop in 11 Bit's long position.

The idea behind 4Mass SA and 11 bit studios 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.