Correlation Between Gaming Factory and ULMA Construccion

Can any of the company-specific risk be diversified away by investing in both Gaming Factory and ULMA Construccion 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 ULMA Construccion 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 ULMA Construccion Polska, you can compare the effects of market volatilities on Gaming Factory and ULMA Construccion 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 ULMA Construccion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Factory and ULMA Construccion.

Diversification Opportunities for Gaming Factory and ULMA Construccion

0.6

Correlation Coefficient

Gaming Factory  ULMA Construccion

Poor diversification

The 3 months correlation between Gaming and ULMA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Factory SA and ULMA Construccion Polska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULMA Construccion Polska 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 ULMA Construccion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULMA Construccion Polska has no effect on the direction of Gaming Factory i.e., Gaming Factory and ULMA Construccion go up and down completely randomly.

Pair Corralation between Gaming Factory and ULMA Construccion

Assuming the 90 days trading horizon Gaming Factory SA is expected to under-perform the ULMA Construccion. In addition to that, Gaming Factory is 2.78 times more volatile than ULMA Construccion Polska. It trades about -0.09 of its total potential returns per unit of risk. ULMA Construccion Polska is currently generating about -0.04 per unit of volatility. If you would invest  7,250  in ULMA Construccion Polska on September 14, 2024 and sell it today you would lose (300.00) from holding ULMA Construccion Polska or give up 4.14% of portfolio value over 90 days.

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

Gaming Factory SA  vs.  ULMA Construccion Polska

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.

ULMA Construccion Polska

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ULMA Construccion Polska has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ULMA Construccion 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 Gaming Factory and ULMA Construccion

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

The idea behind Gaming Factory SA and ULMA Construccion Polska 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.