Correlation Between Pyramid Games and New Tech

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

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

Diversification Opportunities for Pyramid Games and New Tech

0.52

Correlation Coefficient

Pyramid Games  New Tech

Very weak diversification

The 3 months correlation between Pyramid and New is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pyramid Games SA and New Tech Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Capital and Pyramid Games 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 Pyramid Games SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Capital has no effect on the direction of Pyramid Games i.e., Pyramid Games and New Tech go up and down completely randomly.

Pair Corralation between Pyramid Games and New Tech

Assuming the 90 days trading horizon Pyramid Games SA is expected to generate 1.08 times more return on investment than New Tech. However, Pyramid Games is 1.08 times more volatile than New Tech Capital. It trades about -0.09 of its potential returns per unit of risk. New Tech Capital is currently generating about -0.11 per unit of risk. If you would invest  1,340  in Pyramid Games SA on October 25, 2024 and sell it today you would lose (240.00) from holding Pyramid Games SA or give up 17.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.07%
Values	Daily Returns

Pyramid Games SA  vs.  New Tech Capital

Pyramid Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pyramid 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

New Tech Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Tech Capital 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Pyramid Games and New Tech

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

The idea behind Pyramid Games SA and New Tech Capital 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.