Correlation Between Detalion Games and Centrum Finansowe

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

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

Diversification Opportunities for Detalion Games and Centrum Finansowe

0.42

Correlation Coefficient

Detalion Games  Centrum Finansowe

Very weak diversification

The 3 months correlation between Detalion and Centrum is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Detalion Games SA and Centrum Finansowe Banku in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrum Finansowe Banku and Detalion Games 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 Detalion Games SA are associated (or correlated) with Centrum Finansowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrum Finansowe Banku has no effect on the direction of Detalion Games i.e., Detalion Games and Centrum Finansowe go up and down completely randomly.

Pair Corralation between Detalion Games and Centrum Finansowe

Assuming the 90 days trading horizon Detalion Games SA is expected to generate 2.19 times more return on investment than Centrum Finansowe. However, Detalion Games is 2.19 times more volatile than Centrum Finansowe Banku. It trades about 0.2 of its potential returns per unit of risk. Centrum Finansowe Banku is currently generating about 0.02 per unit of risk. If you would invest  96.00  in Detalion Games SA on November 19, 2024 and sell it today you would earn a total of  27.00  from holding Detalion Games SA or generate 28.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	47.46%
Values	Daily Returns

Detalion Games SA  vs.  Centrum Finansowe Banku

Detalion Games SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Detalion Games SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Detalion Games reported solid returns over the last few months and may actually be approaching a breakup point.

Centrum Finansowe Banku

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Centrum Finansowe Banku are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Centrum Finansowe is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Detalion Games and Centrum Finansowe

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

The idea behind Detalion Games SA and Centrum Finansowe Banku 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.