Correlation Between Champion Gaming and Gamehost

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

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

Diversification Opportunities for Champion Gaming and Gamehost

0.21

Correlation Coefficient

Champion Gaming  Gamehost

Modest diversification

The 3 months correlation between Champion and Gamehost is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Champion Gaming Group and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost and Champion Gaming 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 Champion Gaming Group are associated (or correlated) with Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Champion Gaming i.e., Champion Gaming and Gamehost go up and down completely randomly.

Pair Corralation between Champion Gaming and Gamehost

Assuming the 90 days horizon Champion Gaming Group is expected to under-perform the Gamehost. In addition to that, Champion Gaming is 10.12 times more volatile than Gamehost. It trades about -0.13 of its total potential returns per unit of risk. Gamehost is currently generating about 0.16 per unit of volatility. If you would invest  693.00  in Gamehost on December 23, 2024 and sell it today you would earn a total of  80.00  from holding Gamehost or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Champion Gaming Group  vs.  Gamehost

Champion Gaming Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champion Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Gamehost

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gamehost are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Gamehost may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Champion Gaming and Gamehost

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

The idea behind Champion Gaming Group and Gamehost 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.