Correlation Between RETAIL FOOD and DETALION GAMES

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

By analyzing existing cross correlation between RETAIL FOOD GROUP and DETALION GAMES SA, you can compare the effects of market volatilities on RETAIL FOOD and DETALION 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 RETAIL FOOD with a short position of DETALION GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and DETALION GAMES.

Diversification Opportunities for RETAIL FOOD and DETALION GAMES

-0.38

Correlation Coefficient

RETAIL FOOD  DETALION GAMES

Very good diversification

The 3 months correlation between RETAIL and DETALION is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and DETALION GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DETALION GAMES SA and RETAIL FOOD 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 RETAIL FOOD GROUP are associated (or correlated) with DETALION GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DETALION GAMES SA has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and DETALION GAMES go up and down completely randomly.

Pair Corralation between RETAIL FOOD and DETALION GAMES

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 0.68 times more return on investment than DETALION GAMES. However, RETAIL FOOD GROUP is 1.47 times less risky than DETALION GAMES. It trades about 0.01 of its potential returns per unit of risk. DETALION GAMES SA is currently generating about -0.02 per unit of risk. If you would invest  130.00  in RETAIL FOOD GROUP on October 22, 2024 and sell it today you would lose (9.00) from holding RETAIL FOOD GROUP or give up 6.92% of portfolio value over 90 days.

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

RETAIL FOOD GROUP  vs.  DETALION GAMES SA

RETAIL FOOD GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DETALION GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DETALION GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DETALION GAMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RETAIL FOOD and DETALION GAMES

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

The idea behind RETAIL FOOD GROUP and DETALION 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.