Correlation Between Beta MWIG40TR and 3R Games

Can any of the company-specific risk be diversified away by investing in both Beta MWIG40TR and 3R Games 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 Beta MWIG40TR and 3R Games into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beta mWIG40TR Portfelowy and 3R Games SA, you can compare the effects of market volatilities on Beta MWIG40TR and 3R Games 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 Beta MWIG40TR with a short position of 3R Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta MWIG40TR and 3R Games.

Diversification Opportunities for Beta MWIG40TR and 3R Games

0.09

Correlation Coefficient

Beta MWIG40TR  3R Games

Significant diversification

The 3 months correlation between Beta and 3RG is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Beta mWIG40TR Portfelowy and 3R Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3R Games SA and Beta MWIG40TR 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 Beta mWIG40TR Portfelowy are associated (or correlated) with 3R Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3R Games SA has no effect on the direction of Beta MWIG40TR i.e., Beta MWIG40TR and 3R Games go up and down completely randomly.

Pair Corralation between Beta MWIG40TR and 3R Games

Assuming the 90 days trading horizon Beta mWIG40TR Portfelowy is expected to under-perform the 3R Games. But the etf apears to be less risky and, when comparing its historical volatility, Beta mWIG40TR Portfelowy is 3.1 times less risky than 3R Games. The etf trades about -0.07 of its potential returns per unit of risk. The 3R Games SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  30.00  in 3R Games SA on September 3, 2024 and sell it today you would earn a total of  0.00  from holding 3R Games SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Beta mWIG40TR Portfelowy  vs.  3R Games SA

Beta mWIG40TR Portfelowy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beta mWIG40TR Portfelowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beta MWIG40TR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

3R Games SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 3R Games SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, 3R Games is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Beta MWIG40TR and 3R Games

The main advantage of trading using opposite Beta MWIG40TR and 3R Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta MWIG40TR position performs unexpectedly, 3R Games 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 3R Games will offset losses from the drop in 3R Games' long position.

The idea behind Beta mWIG40TR Portfelowy and 3R Games 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.