Correlation Between Glacier Media and Enthusiast Gaming

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

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

Diversification Opportunities for Glacier Media and Enthusiast Gaming

-0.13

Correlation Coefficient

Glacier Media  Enthusiast Gaming

Good diversification

The 3 months correlation between Glacier and Enthusiast is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Media and Enthusiast Gaming Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enthusiast Gaming and Glacier Media 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 Glacier Media are associated (or correlated) with Enthusiast Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enthusiast Gaming has no effect on the direction of Glacier Media i.e., Glacier Media and Enthusiast Gaming go up and down completely randomly.

Pair Corralation between Glacier Media and Enthusiast Gaming

Assuming the 90 days trading horizon Glacier Media is expected to generate 1.5 times more return on investment than Enthusiast Gaming. However, Glacier Media is 1.5 times more volatile than Enthusiast Gaming Holdings. It trades about 0.0 of its potential returns per unit of risk. Enthusiast Gaming Holdings is currently generating about -0.14 per unit of risk. If you would invest  19.00  in Glacier Media on October 22, 2024 and sell it today you would lose (1.00) from holding Glacier Media or give up 5.26% of portfolio value over 90 days.

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

Glacier Media  vs.  Enthusiast Gaming Holdings

Glacier Media

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Media are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Glacier Media displayed solid returns over the last few months and may actually be approaching a breakup point.

Enthusiast Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enthusiast Gaming Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Enthusiast Gaming is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Glacier Media and Enthusiast Gaming

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

The idea behind Glacier Media and Enthusiast Gaming Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.