Correlation Between Corsair Gaming and Transport International

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Can any of the company-specific risk be diversified away by investing in both Corsair Gaming and Transport International 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 Corsair Gaming and Transport International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corsair Gaming and Transport International Holdings, you can compare the effects of market volatilities on Corsair Gaming and Transport International 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 Corsair Gaming with a short position of Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsair Gaming and Transport International.

Diversification Opportunities for Corsair Gaming and Transport International

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Corsair and Transport is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and Transport International go up and down completely randomly.

Pair Corralation between Corsair Gaming and Transport International

Assuming the 90 days horizon Corsair Gaming is expected to generate 2.31 times more return on investment than Transport International. However, Corsair Gaming is 2.31 times more volatile than Transport International Holdings. It trades about 0.01 of its potential returns per unit of risk. Transport International Holdings is currently generating about -0.01 per unit of risk. If you would invest  646.00  in Corsair Gaming on October 4, 2024 and sell it today you would lose (26.00) from holding Corsair Gaming or give up 4.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Corsair Gaming  vs.  Transport International Holdin

 Performance 
       Timeline  
Corsair Gaming 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Corsair Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Corsair Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Transport International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Transport International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transport International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Corsair Gaming and Transport International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Corsair Gaming and Transport International

The main advantage of trading using opposite Corsair Gaming and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corsair Gaming position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.
The idea behind Corsair Gaming and Transport International Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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