Correlation Between Accord Financial and Gamehost

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

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

Diversification Opportunities for Accord Financial and Gamehost

0.07

Correlation Coefficient

Accord Financial  Gamehost

Significant diversification

The 3 months correlation between Accord and Gamehost is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Accord Financial Corp and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost and Accord Financial 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 Accord Financial Corp are associated (or correlated) with Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Accord Financial i.e., Accord Financial and Gamehost go up and down completely randomly.

Pair Corralation between Accord Financial and Gamehost

Assuming the 90 days trading horizon Accord Financial Corp is expected to under-perform the Gamehost. In addition to that, Accord Financial is 1.86 times more volatile than Gamehost. It trades about -0.05 of its total potential returns per unit of risk. Gamehost is currently generating about 0.02 per unit of volatility. If you would invest  1,001  in Gamehost on September 24, 2024 and sell it today you would earn a total of  20.00  from holding Gamehost or generate 2.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Accord Financial Corp  vs.  Gamehost

Accord Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accord Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Accord Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Gamehost

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamehost has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gamehost is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Accord Financial and Gamehost

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

The idea behind Accord Financial Corp and Gamehost 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.