Correlation Between Galaxy Entertainment and ATRenew

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

By analyzing existing cross correlation between Galaxy Entertainment Group and ATRenew Inc DRC, you can compare the effects of market volatilities on Galaxy Entertainment and ATRenew 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 Entertainment with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Entertainment and ATRenew.

Diversification Opportunities for Galaxy Entertainment and ATRenew

0.12

Correlation Coefficient

Galaxy Entertainment  ATRenew

Average diversification

The 3 months correlation between Galaxy and ATRenew is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Entertainment Group and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Galaxy Entertainment 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 Entertainment Group are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Galaxy Entertainment i.e., Galaxy Entertainment and ATRenew go up and down completely randomly.

Pair Corralation between Galaxy Entertainment and ATRenew

Assuming the 90 days horizon Galaxy Entertainment Group is expected to under-perform the ATRenew. But the pink sheet apears to be less risky and, when comparing its historical volatility, Galaxy Entertainment Group is 1.32 times less risky than ATRenew. The pink sheet trades about -0.26 of its potential returns per unit of risk. The ATRenew Inc DRC is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  284.00  in ATRenew Inc DRC on October 23, 2024 and sell it today you would lose (12.50) from holding ATRenew Inc DRC or give up 4.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Galaxy Entertainment Group  vs.  ATRenew Inc DRC

Galaxy Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galaxy Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ATRenew Inc DRC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ATRenew may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Galaxy Entertainment and ATRenew

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

The idea behind Galaxy Entertainment Group and ATRenew Inc DRC 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.