Correlation Between Gaming Corps and Moberg Pharma

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

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

Diversification Opportunities for Gaming Corps and Moberg Pharma

-0.02

Correlation Coefficient

Gaming Corps  Moberg Pharma

Good diversification

The 3 months correlation between Gaming and Moberg is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Corps AB and Moberg Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moberg Pharma AB and Gaming Corps 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 Gaming Corps AB are associated (or correlated) with Moberg Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moberg Pharma AB has no effect on the direction of Gaming Corps i.e., Gaming Corps and Moberg Pharma go up and down completely randomly.

Pair Corralation between Gaming Corps and Moberg Pharma

Assuming the 90 days trading horizon Gaming Corps AB is expected to generate 0.68 times more return on investment than Moberg Pharma. However, Gaming Corps AB is 1.48 times less risky than Moberg Pharma. It trades about 0.02 of its potential returns per unit of risk. Moberg Pharma AB is currently generating about -0.02 per unit of risk. If you would invest  60.00  in Gaming Corps AB on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Gaming Corps AB or generate 0.0% return on investment over 90 days.

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

Gaming Corps AB  vs.  Moberg Pharma AB

Gaming Corps AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaming Corps AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gaming Corps is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Moberg Pharma AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moberg Pharma AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Moberg Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gaming Corps and Moberg Pharma

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

The idea behind Gaming Corps AB and Moberg Pharma AB 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.