Correlation Between Corsair Gaming and INTERNATIONAL

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

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

Diversification Opportunities for Corsair Gaming and INTERNATIONAL

-0.08

Correlation Coefficient

Corsair Gaming  INTERNATIONAL

Good diversification

The 3 months correlation between Corsair and INTERNATIONAL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and INTERNATIONAL FLAVORS FRAGRANC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL FLAVORS and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL FLAVORS has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and INTERNATIONAL go up and down completely randomly.

Pair Corralation between Corsair Gaming and INTERNATIONAL

Given the investment horizon of 90 days Corsair Gaming is expected to generate 2.82 times more return on investment than INTERNATIONAL. However, Corsair Gaming is 2.82 times more volatile than INTERNATIONAL FLAVORS FRAGRANCES. It trades about 0.17 of its potential returns per unit of risk. INTERNATIONAL FLAVORS FRAGRANCES is currently generating about -0.01 per unit of risk. If you would invest  630.00  in Corsair Gaming on October 25, 2024 and sell it today you would earn a total of  244.00  from holding Corsair Gaming or generate 38.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Corsair Gaming  vs.  INTERNATIONAL FLAVORS FRAGRANC

Corsair Gaming

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

INTERNATIONAL FLAVORS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNATIONAL FLAVORS FRAGRANCES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTERNATIONAL is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Corsair Gaming and INTERNATIONAL

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

The idea behind Corsair Gaming and INTERNATIONAL FLAVORS FRAGRANCES 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.