Correlation Between ALEFARM BREWING and MOVIE GAMES

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

By analyzing existing cross correlation between ALEFARM BREWING DK 05 and MOVIE GAMES SA, you can compare the effects of market volatilities on ALEFARM BREWING and MOVIE 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 ALEFARM BREWING with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and MOVIE GAMES.

Diversification Opportunities for ALEFARM BREWING and MOVIE GAMES

0.38

Correlation Coefficient

ALEFARM BREWING  MOVIE GAMES

Weak diversification

The 3 months correlation between ALEFARM and MOVIE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and ALEFARM BREWING 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 ALEFARM BREWING DK 05 are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of ALEFARM BREWING i.e., ALEFARM BREWING and MOVIE GAMES go up and down completely randomly.

Pair Corralation between ALEFARM BREWING and MOVIE GAMES

Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to under-perform the MOVIE GAMES. In addition to that, ALEFARM BREWING is 1.17 times more volatile than MOVIE GAMES SA. It trades about 0.0 of its total potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.02 per unit of volatility. If you would invest  374.00  in MOVIE GAMES SA on December 3, 2024 and sell it today you would earn a total of  11.00  from holding MOVIE GAMES SA or generate 2.94% return on investment over 90 days.

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

ALEFARM BREWING DK 05  vs.  MOVIE GAMES SA

ALEFARM BREWING DK

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALEFARM BREWING DK 05 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ALEFARM BREWING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MOVIE GAMES SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOVIE GAMES SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOVIE GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALEFARM BREWING and MOVIE GAMES

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

The idea behind ALEFARM BREWING DK 05 and MOVIE 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.