Correlation Between Gamedust and Baked Games

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

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

Diversification Opportunities for Gamedust and Baked Games

-0.48

Correlation Coefficient

Gamedust  Baked Games

Very good diversification

The 3 months correlation between Gamedust and Baked is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gamedust SA and Baked Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baked Games SA and Gamedust 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 Gamedust SA are associated (or correlated) with Baked Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baked Games SA has no effect on the direction of Gamedust i.e., Gamedust and Baked Games go up and down completely randomly.

Pair Corralation between Gamedust and Baked Games

Assuming the 90 days trading horizon Gamedust SA is expected to under-perform the Baked Games. But the stock apears to be less risky and, when comparing its historical volatility, Gamedust SA is 1.47 times less risky than Baked Games. The stock trades about -0.08 of its potential returns per unit of risk. The Baked Games SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  312.00  in Baked Games SA on November 29, 2024 and sell it today you would lose (30.00) from holding Baked Games SA or give up 9.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.45%
Values	Daily Returns

Gamedust SA  vs.  Baked Games SA

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.

Baked Games SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baked Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Baked 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 Gamedust and Baked Games

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

The idea behind Gamedust SA and Baked 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.