Correlation Between AVITA Medical and DETALION GAMES

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

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

Diversification Opportunities for AVITA Medical and DETALION GAMES

-0.9

Correlation Coefficient

AVITA Medical  DETALION GAMES

Pay attention - limited upside

The 3 months correlation between AVITA and DETALION is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and DETALION GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DETALION GAMES SA and AVITA Medical 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 AVITA Medical are associated (or correlated) with DETALION GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DETALION GAMES SA has no effect on the direction of AVITA Medical i.e., AVITA Medical and DETALION GAMES go up and down completely randomly.

Pair Corralation between AVITA Medical and DETALION GAMES

Assuming the 90 days trading horizon AVITA Medical is expected to generate 1.08 times more return on investment than DETALION GAMES. However, AVITA Medical is 1.08 times more volatile than DETALION GAMES SA. It trades about 0.02 of its potential returns per unit of risk. DETALION GAMES SA is currently generating about -0.04 per unit of risk. If you would invest  248.00  in AVITA Medical on October 6, 2024 and sell it today you would earn a total of  2.00  from holding AVITA Medical or generate 0.81% return on investment over 90 days.

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

AVITA Medical  vs.  DETALION GAMES SA

AVITA Medical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AVITA Medical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, AVITA Medical reported solid returns over the last few months and may actually be approaching a breakup point.

DETALION GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DETALION GAMES SA 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 AVITA Medical and DETALION GAMES

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

The idea behind AVITA Medical and DETALION GAMES SA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.