Correlation Between GAMING FAC and Blackline

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

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

Diversification Opportunities for GAMING FAC and Blackline

-0.5

Correlation Coefficient

GAMING FAC  Blackline

Very good diversification

The 3 months correlation between GAMING and Blackline is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of GAMING FAC i.e., GAMING FAC and Blackline go up and down completely randomly.

Pair Corralation between GAMING FAC and Blackline

Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.32 times more return on investment than Blackline. However, GAMING FAC is 1.32 times more volatile than Blackline. It trades about 0.03 of its potential returns per unit of risk. Blackline is currently generating about 0.01 per unit of risk. If you would invest  122.00  in GAMING FAC SA on October 9, 2024 and sell it today you would earn a total of  46.00  from holding GAMING FAC SA or generate 37.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.81%
Values	Daily Returns

GAMING FAC SA  vs.  Blackline

GAMING FAC SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMING FAC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating 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.

Blackline

Risk-Adjusted Performance

10 of 100

Good

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

Pair Trading with GAMING FAC and Blackline

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

The idea behind GAMING FAC SA and Blackline 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.