Correlation Between TGS Esports and American Hotel

Can any of the company-specific risk be diversified away by investing in both TGS Esports and American Hotel 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 TGS Esports and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TGS Esports and American Hotel Income, you can compare the effects of market volatilities on TGS Esports and American Hotel 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 TGS Esports with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGS Esports and American Hotel.

Diversification Opportunities for TGS Esports and American Hotel

0.0

Correlation Coefficient

TGS Esports  American Hotel

Pay attention - limited upside

The 3 months correlation between TGS and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TGS Esports and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and TGS Esports 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 TGS Esports are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of TGS Esports i.e., TGS Esports and American Hotel go up and down completely randomly.

Pair Corralation between TGS Esports and American Hotel

If you would invest  36.00  in American Hotel Income on December 2, 2024 and sell it today you would earn a total of  29.00  from holding American Hotel Income or generate 80.56% return on investment over 90 days.

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

TGS Esports  vs.  American Hotel Income

TGS Esports

Risk-Adjusted Performance

Very Weak

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

American Hotel Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Hotel Income are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, American Hotel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TGS Esports and American Hotel

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

The idea behind TGS Esports and American Hotel Income 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.