Correlation Between FUTURE GAMING and EAST SIDE

Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and EAST SIDE 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 FUTURE GAMING and EAST SIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FUTURE GAMING GRP and EAST SIDE GAMES, you can compare the effects of market volatilities on FUTURE GAMING and EAST SIDE 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 FUTURE GAMING with a short position of EAST SIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and EAST SIDE.

Diversification Opportunities for FUTURE GAMING and EAST SIDE

0.74

Correlation Coefficient

FUTURE GAMING  EAST SIDE

Poor diversification

The 3 months correlation between FUTURE and EAST is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and EAST SIDE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST SIDE GAMES and FUTURE 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 FUTURE GAMING GRP are associated (or correlated) with EAST SIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST SIDE GAMES has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and EAST SIDE go up and down completely randomly.

Pair Corralation between FUTURE GAMING and EAST SIDE

Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to generate 0.79 times more return on investment than EAST SIDE. However, FUTURE GAMING GRP is 1.26 times less risky than EAST SIDE. It trades about -0.04 of its potential returns per unit of risk. EAST SIDE GAMES is currently generating about -0.04 per unit of risk. If you would invest  59.00  in FUTURE GAMING GRP on September 17, 2024 and sell it today you would lose (8.00) from holding FUTURE GAMING GRP or give up 13.56% of portfolio value over 90 days.

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

FUTURE GAMING GRP  vs.  EAST SIDE GAMES

FUTURE GAMING GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FUTURE GAMING GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

EAST SIDE GAMES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAST SIDE GAMES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with FUTURE GAMING and EAST SIDE

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

The idea behind FUTURE GAMING GRP and EAST SIDE GAMES 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.