Correlation Between Dice Sport and B Investments

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

By analyzing existing cross correlation between Dice Sport Casual and B Investments Holding, you can compare the effects of market volatilities on Dice Sport and B Investments 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 Dice Sport with a short position of B Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dice Sport and B Investments.

Diversification Opportunities for Dice Sport and B Investments

-0.04

Correlation Coefficient

Dice Sport  B Investments

Good diversification

The 3 months correlation between Dice and BINV is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dice Sport Casual and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding and Dice Sport 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 Dice Sport Casual are associated (or correlated) with B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of Dice Sport i.e., Dice Sport and B Investments go up and down completely randomly.

Pair Corralation between Dice Sport and B Investments

Assuming the 90 days trading horizon Dice Sport Casual is expected to generate 2.46 times more return on investment than B Investments. However, Dice Sport is 2.46 times more volatile than B Investments Holding. It trades about 0.23 of its potential returns per unit of risk. B Investments Holding is currently generating about 0.13 per unit of risk. If you would invest  174.00  in Dice Sport Casual on October 23, 2024 and sell it today you would earn a total of  82.00  from holding Dice Sport Casual or generate 47.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.0%
Values	Daily Returns

Dice Sport Casual  vs.  B Investments Holding

Dice Sport Casual

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dice Sport Casual are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Dice Sport reported solid returns over the last few months and may actually be approaching a breakup point.

B Investments Holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in B Investments Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, B Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dice Sport and B Investments

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

The idea behind Dice Sport Casual and B Investments Holding 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.