Correlation Between Pentagon I and Champion Gaming

Can any of the company-specific risk be diversified away by investing in both Pentagon I and Champion Gaming 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 Pentagon I and Champion Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pentagon I Capital and Champion Gaming Group, you can compare the effects of market volatilities on Pentagon I and Champion Gaming 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 Pentagon I with a short position of Champion Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentagon I and Champion Gaming.

Diversification Opportunities for Pentagon I and Champion Gaming

-1.0

Correlation Coefficient

Pentagon I  Champion Gaming

Pay attention - limited upside

The 3 months correlation between Pentagon and Champion is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Pentagon I Capital and Champion Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Gaming Group and Pentagon I 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 Pentagon I Capital are associated (or correlated) with Champion Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Gaming Group has no effect on the direction of Pentagon I i.e., Pentagon I and Champion Gaming go up and down completely randomly.

Pair Corralation between Pentagon I and Champion Gaming

If you would invest  1.00  in Champion Gaming Group on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Champion Gaming Group or generate 0.0% return on investment over 90 days.

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

Pentagon I Capital  vs.  Champion Gaming Group

Pentagon I Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pentagon I Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Pentagon I is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Champion Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champion Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Champion Gaming is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Pentagon I and Champion Gaming

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

The idea behind Pentagon I Capital and Champion Gaming Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.