Correlation Between GAMING FAC and CVB Financial

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

Diversification Opportunities for GAMING FAC and CVB Financial

-0.49

Correlation Coefficient

GAMING FAC  CVB Financial

Very good diversification

The 3 months correlation between GAMING and CVB is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp 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 CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of GAMING FAC i.e., GAMING FAC and CVB Financial go up and down completely randomly.

Pair Corralation between GAMING FAC and CVB Financial

Assuming the 90 days horizon GAMING FAC is expected to generate 4.33 times less return on investment than CVB Financial. In addition to that, GAMING FAC is 1.16 times more volatile than CVB Financial Corp. It trades about 0.02 of its total potential returns per unit of risk. CVB Financial Corp is currently generating about 0.09 per unit of volatility. If you would invest  1,723  in CVB Financial Corp on October 23, 2024 and sell it today you would earn a total of  247.00  from holding CVB Financial Corp or generate 14.34% return on investment over 90 days.

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

GAMING FAC SA  vs.  CVB Financial Corp

GAMING FAC SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GAMING FAC SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

CVB Financial Corp

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVB Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CVB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMING FAC and CVB Financial

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

The idea behind GAMING FAC SA and CVB Financial Corp 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.