Correlation Between Novina SA and Detalion Games

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

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

Diversification Opportunities for Novina SA and Detalion Games

-0.33

Correlation Coefficient

Novina SA  Detalion Games

Very good diversification

The 3 months correlation between Novina and Detalion is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Novina SA 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 Novina SA 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 Novina SA 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 Novina SA i.e., Novina SA and Detalion Games go up and down completely randomly.

Pair Corralation between Novina SA and Detalion Games

Assuming the 90 days trading horizon Novina SA is expected to generate 0.69 times more return on investment than Detalion Games. However, Novina SA is 1.45 times less risky than Detalion Games. It trades about 0.03 of its potential returns per unit of risk. Detalion Games SA is currently generating about -0.22 per unit of risk. If you would invest  112.00  in Novina SA on August 31, 2024 and sell it today you would earn a total of  3.00  from holding Novina SA or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.74%
Values	Daily Returns

Novina SA  vs.  Detalion Games SA

Novina SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Novina SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Novina SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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. 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 December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Novina SA and Detalion Games

The main advantage of trading using opposite Novina SA and Detalion Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novina SA 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' long position.

The idea behind Novina SA 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.