Correlation Between Gaussin and Immersion

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

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

Diversification Opportunities for Gaussin and Immersion

-0.11

Correlation Coefficient

Gaussin  Immersion

Good diversification

The 3 months correlation between Gaussin and Immersion is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Gaussin and Immersion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion SA and Gaussin 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 Gaussin are associated (or correlated) with Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion SA has no effect on the direction of Gaussin i.e., Gaussin and Immersion go up and down completely randomly.

Pair Corralation between Gaussin and Immersion

If you would invest  11.00  in Gaussin on October 15, 2024 and sell it today you would earn a total of  0.00  from holding Gaussin or generate 0.0% return on investment over 90 days.

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

Gaussin  vs.  Immersion SA

Gaussin

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaussin are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gaussin reported solid returns over the last few months and may actually be approaching a breakup point.

Immersion SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immersion SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Immersion is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Gaussin and Immersion

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

The idea behind Gaussin and Immersion SA 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.