Correlation Between Aristocrat Leisure and QINGCI GAMES

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

By analyzing existing cross correlation between Aristocrat Leisure Limited and QINGCI GAMES INC, you can compare the effects of market volatilities on Aristocrat Leisure and QINGCI 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 Aristocrat Leisure with a short position of QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and QINGCI GAMES.

Diversification Opportunities for Aristocrat Leisure and QINGCI GAMES

-0.59

Correlation Coefficient

Aristocrat Leisure  QINGCI GAMES

Excellent diversification

The 3 months correlation between Aristocrat and QINGCI is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and QINGCI GAMES go up and down completely randomly.

Pair Corralation between Aristocrat Leisure and QINGCI GAMES

Assuming the 90 days horizon Aristocrat Leisure Limited is expected to under-perform the QINGCI GAMES. But the stock apears to be less risky and, when comparing its historical volatility, Aristocrat Leisure Limited is 2.43 times less risky than QINGCI GAMES. The stock trades about -0.07 of its potential returns per unit of risk. The QINGCI GAMES INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  33.00  in QINGCI GAMES INC on December 24, 2024 and sell it today you would earn a total of  2.00  from holding QINGCI GAMES INC or generate 6.06% return on investment over 90 days.

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

Aristocrat Leisure Limited  vs.  QINGCI GAMES INC

Aristocrat Leisure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aristocrat Leisure Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

QINGCI GAMES INC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, QINGCI GAMES may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aristocrat Leisure and QINGCI GAMES

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

The idea behind Aristocrat Leisure Limited and QINGCI GAMES 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..