Correlation Between True Games and Esotiq Henderson

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

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

Diversification Opportunities for True Games and Esotiq Henderson

-0.14

Correlation Coefficient

True Games  Esotiq Henderson

Good diversification

The 3 months correlation between True and Esotiq is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate and Esotiq Henderson SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esotiq Henderson and True 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 True Games Syndicate are associated (or correlated) with Esotiq Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esotiq Henderson has no effect on the direction of True Games i.e., True Games and Esotiq Henderson go up and down completely randomly.

Pair Corralation between True Games and Esotiq Henderson

Assuming the 90 days trading horizon True Games Syndicate is expected to generate 2.82 times more return on investment than Esotiq Henderson. However, True Games is 2.82 times more volatile than Esotiq Henderson SA. It trades about 0.12 of its potential returns per unit of risk. Esotiq Henderson SA is currently generating about -0.15 per unit of risk. If you would invest  44.00  in True Games Syndicate on December 30, 2024 and sell it today you would earn a total of  10.00  from holding True Games Syndicate or generate 22.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.54%
Values	Daily Returns

True Games Syndicate  vs.  Esotiq Henderson SA

True Games Syndicate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in True Games Syndicate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, True Games reported solid returns over the last few months and may actually be approaching a breakup point.

Esotiq Henderson

Risk-Adjusted Performance

Very Weak

Over the last 90 days Esotiq Henderson SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with True Games and Esotiq Henderson

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

The idea behind True Games Syndicate and Esotiq Henderson 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.