Correlation Between Galaxy Gaming and Graham Holdings

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

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

Diversification Opportunities for Galaxy Gaming and Graham Holdings

0.31

Correlation Coefficient

Galaxy Gaming  Graham Holdings

Weak diversification

The 3 months correlation between Galaxy and Graham is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Gaming and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and Galaxy Gaming 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 Galaxy Gaming are associated (or correlated) with Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Galaxy Gaming i.e., Galaxy Gaming and Graham Holdings go up and down completely randomly.

Pair Corralation between Galaxy Gaming and Graham Holdings

Given the investment horizon of 90 days Galaxy Gaming is expected to generate 2.13 times less return on investment than Graham Holdings. But when comparing it to its historical volatility, Galaxy Gaming is 1.8 times less risky than Graham Holdings. It trades about 0.07 of its potential returns per unit of risk. Graham Holdings Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  88,711  in Graham Holdings Co on October 27, 2024 and sell it today you would earn a total of  2,005  from holding Graham Holdings Co or generate 2.26% return on investment over 90 days.

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

Galaxy Gaming  vs.  Graham Holdings Co

Galaxy Gaming

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Gaming are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Galaxy Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Graham Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Graham Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galaxy Gaming and Graham Holdings

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

The idea behind Galaxy Gaming and Graham Holdings Co 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 Commodity Directory module to find actively traded commodities issued by global exchanges.