Correlation Between Tait Marketing and GAME HOURS

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

By analyzing existing cross correlation between Tait Marketing Distribution and GAME HOURS, you can compare the effects of market volatilities on Tait Marketing and GAME HOURS 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 Tait Marketing with a short position of GAME HOURS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tait Marketing and GAME HOURS.

Diversification Opportunities for Tait Marketing and GAME HOURS

0.06

Correlation Coefficient

Tait Marketing  GAME HOURS

Significant diversification

The 3 months correlation between Tait and GAME is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution and GAME HOURS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAME HOURS and Tait Marketing 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 Tait Marketing Distribution are associated (or correlated) with GAME HOURS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAME HOURS has no effect on the direction of Tait Marketing i.e., Tait Marketing and GAME HOURS go up and down completely randomly.

Pair Corralation between Tait Marketing and GAME HOURS

Assuming the 90 days trading horizon Tait Marketing is expected to generate 9.05 times less return on investment than GAME HOURS. But when comparing it to its historical volatility, Tait Marketing Distribution is 8.39 times less risky than GAME HOURS. It trades about 0.18 of its potential returns per unit of risk. GAME HOURS is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,718  in GAME HOURS on December 20, 2024 and sell it today you would earn a total of  1,857  from holding GAME HOURS or generate 108.09% return on investment over 90 days.

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

Tait Marketing Distribution  vs.  GAME HOURS

Tait Marketing Distr

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tait Marketing Distribution are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tait Marketing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GAME HOURS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GAME HOURS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GAME HOURS showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tait Marketing and GAME HOURS

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

The idea behind Tait Marketing Distribution and GAME HOURS 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.