Correlation Between Raketech Group and Scout Gaming

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

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

Diversification Opportunities for Raketech Group and Scout Gaming

-0.13

Correlation Coefficient

Raketech Group  Scout Gaming

Good diversification

The 3 months correlation between Raketech and Scout is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Raketech Group Holding and Scout Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Gaming Group and Raketech Group 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 Raketech Group Holding are associated (or correlated) with Scout Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Gaming Group has no effect on the direction of Raketech Group i.e., Raketech Group and Scout Gaming go up and down completely randomly.

Pair Corralation between Raketech Group and Scout Gaming

Assuming the 90 days trading horizon Raketech Group Holding is expected to under-perform the Scout Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Raketech Group Holding is 1.42 times less risky than Scout Gaming. The stock trades about -0.15 of its potential returns per unit of risk. The Scout Gaming Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Scout Gaming Group on September 13, 2024 and sell it today you would lose (2.00) from holding Scout Gaming Group or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Raketech Group Holding  vs.  Scout Gaming Group

Raketech Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raketech Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Scout Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scout Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Scout Gaming is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Raketech Group and Scout Gaming

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

The idea behind Raketech Group Holding and Scout 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.