Correlation Between Gamedust and PCC Rokita

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

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

Diversification Opportunities for Gamedust and PCC Rokita

0.77

Correlation Coefficient

Gamedust  PCC Rokita

Poor diversification

The 3 months correlation between Gamedust and PCC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gamedust SA and PCC Rokita SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCC Rokita 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 PCC Rokita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCC Rokita SA has no effect on the direction of Gamedust i.e., Gamedust and PCC Rokita go up and down completely randomly.

Pair Corralation between Gamedust and PCC Rokita

Assuming the 90 days trading horizon Gamedust SA is expected to under-perform the PCC Rokita. In addition to that, Gamedust is 3.89 times more volatile than PCC Rokita SA. It trades about -0.13 of its total potential returns per unit of risk. PCC Rokita SA is currently generating about -0.21 per unit of volatility. If you would invest  8,480  in PCC Rokita SA on September 13, 2024 and sell it today you would lose (1,180) from holding PCC Rokita SA or give up 13.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	87.1%
Values	Daily Returns

Gamedust SA  vs.  PCC Rokita SA

Gamedust SA

Risk-Adjusted Performance

0 of 100

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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

PCC Rokita SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCC Rokita 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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Gamedust and PCC Rokita

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

The idea behind Gamedust SA and PCC Rokita 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.