Correlation Between Dino Polska and Gamedust

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

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

Diversification Opportunities for Dino Polska and Gamedust

-0.82

Correlation Coefficient

Dino Polska  Gamedust

Pay attention - limited upside

The 3 months correlation between Dino and Gamedust is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dino Polska SA and Gamedust SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamedust SA and Dino Polska 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 Dino Polska SA are associated (or correlated) with Gamedust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamedust SA has no effect on the direction of Dino Polska i.e., Dino Polska and Gamedust go up and down completely randomly.

Pair Corralation between Dino Polska and Gamedust

Assuming the 90 days trading horizon Dino Polska is expected to generate 7.2 times less return on investment than Gamedust. But when comparing it to its historical volatility, Dino Polska SA is 4.1 times less risky than Gamedust. It trades about 0.11 of its potential returns per unit of risk. Gamedust SA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7.22  in Gamedust SA on November 29, 2024 and sell it today you would earn a total of  0.96  from holding Gamedust SA or generate 13.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	59.09%
Values	Daily Returns

Dino Polska SA  vs.  Gamedust SA

Dino Polska SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dino Polska SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Dino Polska reported solid returns over the last few months and may actually be approaching a breakup point.

Gamedust SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamedust SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Dino Polska and Gamedust

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

The idea behind Dino Polska SA and Gamedust 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.