Correlation Between GAMES OPERATORS and SUPER GROUP

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

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

Diversification Opportunities for GAMES OPERATORS and SUPER GROUP

-0.51

Correlation Coefficient

GAMES OPERATORS  SUPER GROUP

Excellent diversification

The 3 months correlation between GAMES and SUPER is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GAMES OPERATORS SA and SUPER GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER GROUP LTD and GAMES OPERATORS 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 GAMES OPERATORS SA are associated (or correlated) with SUPER GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER GROUP LTD has no effect on the direction of GAMES OPERATORS i.e., GAMES OPERATORS and SUPER GROUP go up and down completely randomly.

Pair Corralation between GAMES OPERATORS and SUPER GROUP

Assuming the 90 days horizon GAMES OPERATORS SA is expected to under-perform the SUPER GROUP. But the stock apears to be less risky and, when comparing its historical volatility, GAMES OPERATORS SA is 1.76 times less risky than SUPER GROUP. The stock trades about -0.06 of its potential returns per unit of risk. The SUPER GROUP LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  73.00  in SUPER GROUP LTD on October 10, 2024 and sell it today you would earn a total of  76.00  from holding SUPER GROUP LTD or generate 104.11% return on investment over 90 days.

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

GAMES OPERATORS SA  vs.  SUPER GROUP LTD

GAMES OPERATORS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMES OPERATORS 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.

SUPER GROUP LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SUPER GROUP LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, SUPER GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMES OPERATORS and SUPER GROUP

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

The idea behind GAMES OPERATORS SA and SUPER GROUP LTD 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.