Correlation Between Noble Financials and Movie Games

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

By analyzing existing cross correlation between Noble Financials SA and Movie Games SA, you can compare the effects of market volatilities on Noble Financials and Movie 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 Noble Financials with a short position of Movie Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Financials and Movie Games.

Diversification Opportunities for Noble Financials and Movie Games

0.79

Correlation Coefficient

Noble Financials  Movie Games

Poor diversification

The 3 months correlation between Noble and Movie is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials SA and Movie Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movie Games SA and Noble Financials 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 Noble Financials SA are associated (or correlated) with Movie Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movie Games SA has no effect on the direction of Noble Financials i.e., Noble Financials and Movie Games go up and down completely randomly.

Pair Corralation between Noble Financials and Movie Games

Assuming the 90 days trading horizon Noble Financials SA is expected to generate 1.4 times more return on investment than Movie Games. However, Noble Financials is 1.4 times more volatile than Movie Games SA. It trades about 0.04 of its potential returns per unit of risk. Movie Games SA is currently generating about -0.01 per unit of risk. If you would invest  5,050  in Noble Financials SA on September 29, 2024 and sell it today you would earn a total of  2,370  from holding Noble Financials SA or generate 46.93% return on investment over 90 days.

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

Noble Financials SA  vs.  Movie Games SA

Noble Financials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble Financials SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Movie Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Movie Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Noble Financials and Movie Games

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

The idea behind Noble Financials SA and Movie Games SA 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.

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.