Correlation Between GAMING FAC and DBS GROUP

Can any of the company-specific risk be diversified away by investing in both GAMING FAC and DBS 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 GAMING FAC and DBS GROUP 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 DBS GROUP ADR4, you can compare the effects of market volatilities on GAMING FAC and DBS 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 GAMING FAC with a short position of DBS GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and DBS GROUP.

Diversification Opportunities for GAMING FAC and DBS GROUP

-0.52

Correlation Coefficient

GAMING FAC  DBS GROUP

Excellent diversification

The 3 months correlation between GAMING and DBS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and DBS GROUP ADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS GROUP ADR4 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 DBS GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS GROUP ADR4 has no effect on the direction of GAMING FAC i.e., GAMING FAC and DBS GROUP go up and down completely randomly.

Pair Corralation between GAMING FAC and DBS GROUP

Assuming the 90 days horizon GAMING FAC is expected to generate 2.68 times less return on investment than DBS GROUP. In addition to that, GAMING FAC is 2.62 times more volatile than DBS GROUP ADR4. It trades about 0.03 of its total potential returns per unit of risk. DBS GROUP ADR4 is currently generating about 0.19 per unit of volatility. If you would invest  10,654  in DBS GROUP ADR4 on October 26, 2024 and sell it today you would earn a total of  1,646  from holding DBS GROUP ADR4 or generate 15.45% 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.  DBS GROUP ADR4

GAMING FAC SA

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GAMING FAC SA are ranked lower than 2 (%) 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.

DBS GROUP ADR4

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DBS GROUP ADR4 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DBS GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMING FAC and DBS GROUP

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

The idea behind GAMING FAC SA and DBS GROUP ADR4 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.