Correlation Between Gaming Factory and Examobile

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

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

Diversification Opportunities for Gaming Factory and Examobile

-0.14

Correlation Coefficient

Gaming Factory  Examobile

Good diversification

The 3 months correlation between Gaming and Examobile is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Factory SA and Examobile SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Examobile SA and Gaming Factory 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 Factory SA are associated (or correlated) with Examobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Examobile SA has no effect on the direction of Gaming Factory i.e., Gaming Factory and Examobile go up and down completely randomly.

Pair Corralation between Gaming Factory and Examobile

Assuming the 90 days trading horizon Gaming Factory SA is expected to under-perform the Examobile. But the stock apears to be less risky and, when comparing its historical volatility, Gaming Factory SA is 1.71 times less risky than Examobile. The stock trades about -0.08 of its potential returns per unit of risk. The Examobile SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  358.00  in Examobile SA on September 29, 2024 and sell it today you would lose (2.00) from holding Examobile SA or give up 0.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	55.0%
Values	Daily Returns

Gaming Factory SA  vs.  Examobile SA

Gaming Factory SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaming Factory 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.

Examobile SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Examobile SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Examobile may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gaming Factory and Examobile

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

The idea behind Gaming Factory SA and Examobile 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.