Correlation Between Hydract AS and TROPHY GAMES

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

By analyzing existing cross correlation between Hydract AS and TROPHY GAMES Development, you can compare the effects of market volatilities on Hydract AS and TROPHY GAMES 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 Hydract AS with a short position of TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydract AS and TROPHY GAMES.

Diversification Opportunities for Hydract AS and TROPHY GAMES

-0.42

Correlation Coefficient

Hydract AS  TROPHY GAMES

Very good diversification

The 3 months correlation between Hydract and TROPHY is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hydract AS and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development and Hydract AS 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 Hydract AS are associated (or correlated) with TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Hydract AS i.e., Hydract AS and TROPHY GAMES go up and down completely randomly.

Pair Corralation between Hydract AS and TROPHY GAMES

Assuming the 90 days trading horizon Hydract AS is expected to generate 4.24 times more return on investment than TROPHY GAMES. However, Hydract AS is 4.24 times more volatile than TROPHY GAMES Development. It trades about 0.03 of its potential returns per unit of risk. TROPHY GAMES Development is currently generating about 0.0 per unit of risk. If you would invest  161.00  in Hydract AS on October 7, 2024 and sell it today you would lose (108.00) from holding Hydract AS or give up 67.08% of portfolio value over 90 days.

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

Hydract AS  vs.  TROPHY GAMES Development

Hydract AS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hydract AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Hydract AS sustained solid returns over the last few months and may actually be approaching a breakup point.

TROPHY GAMES Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TROPHY GAMES Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hydract AS and TROPHY GAMES

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

The idea behind Hydract AS and TROPHY GAMES Development 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.