Correlation Between Enthusiast Gaming and Telus Corp

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

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

Diversification Opportunities for Enthusiast Gaming and Telus Corp

-0.15

Correlation Coefficient

Enthusiast Gaming  Telus Corp

Good diversification

The 3 months correlation between Enthusiast and Telus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enthusiast Gaming Holdings and Telus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telus Corp and Enthusiast 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 Enthusiast Gaming Holdings are associated (or correlated) with Telus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telus Corp has no effect on the direction of Enthusiast Gaming i.e., Enthusiast Gaming and Telus Corp go up and down completely randomly.

Pair Corralation between Enthusiast Gaming and Telus Corp

Assuming the 90 days trading horizon Enthusiast Gaming Holdings is expected to generate 5.08 times more return on investment than Telus Corp. However, Enthusiast Gaming is 5.08 times more volatile than Telus Corp. It trades about 0.05 of its potential returns per unit of risk. Telus Corp is currently generating about -0.01 per unit of risk. If you would invest  14.00  in Enthusiast Gaming Holdings on September 4, 2024 and sell it today you would earn a total of  1.00  from holding Enthusiast Gaming Holdings or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Enthusiast Gaming Holdings  vs.  Telus Corp

Enthusiast Gaming

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enthusiast Gaming Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Enthusiast Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

Telus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Telus Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Enthusiast Gaming and Telus Corp

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

The idea behind Enthusiast Gaming Holdings and Telus Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.