Correlation Between Galaxy Gaming and Champion Gaming

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

By analyzing existing cross correlation between Galaxy Gaming and Champion Gaming Group, you can compare the effects of market volatilities on Galaxy Gaming and Champion Gaming 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 Champion Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Gaming and Champion Gaming.

Diversification Opportunities for Galaxy Gaming and Champion Gaming

-0.61

Correlation Coefficient

Galaxy Gaming  Champion Gaming

Excellent diversification

The 3 months correlation between Galaxy and Champion is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Gaming and Champion Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Gaming Group 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 Champion Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Gaming Group has no effect on the direction of Galaxy Gaming i.e., Galaxy Gaming and Champion Gaming go up and down completely randomly.

Pair Corralation between Galaxy Gaming and Champion Gaming

Given the investment horizon of 90 days Galaxy Gaming is expected to generate 0.07 times more return on investment than Champion Gaming. However, Galaxy Gaming is 14.39 times less risky than Champion Gaming. It trades about 0.09 of its potential returns per unit of risk. Champion Gaming Group is currently generating about -0.13 per unit of risk. If you would invest  273.00  in Galaxy Gaming on December 22, 2024 and sell it today you would earn a total of  12.00  from holding Galaxy Gaming or generate 4.4% return on investment over 90 days.

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

Galaxy Gaming  vs.  Champion Gaming Group

Galaxy Gaming

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Gaming are ranked lower than 7 (%) 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.

Champion Gaming Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champion Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Galaxy Gaming and Champion Gaming

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

The idea behind Galaxy Gaming and Champion Gaming Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.