Correlation Between GAMING FAC and Adobe

Can any of the company-specific risk be diversified away by investing in both GAMING FAC and Adobe 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 Adobe 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 Adobe Inc, you can compare the effects of market volatilities on GAMING FAC and Adobe 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 Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and Adobe.

Diversification Opportunities for GAMING FAC and Adobe

-0.37

Correlation Coefficient

GAMING FAC  Adobe

Very good diversification

The 3 months correlation between GAMING and Adobe is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of GAMING FAC i.e., GAMING FAC and Adobe go up and down completely randomly.

Pair Corralation between GAMING FAC and Adobe

Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.41 times more return on investment than Adobe. However, GAMING FAC is 1.41 times more volatile than Adobe Inc. It trades about 0.0 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.09 per unit of risk. If you would invest  177.00  in GAMING FAC SA on October 22, 2024 and sell it today you would lose (7.00) from holding GAMING FAC SA or give up 3.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

GAMING FAC SA  vs.  Adobe Inc

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 nearly stable basic indicators, GAMING FAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Adobe Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GAMING FAC and Adobe

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

The idea behind GAMING FAC SA and Adobe Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.