Correlation Between Champion Gaming and Galaxy Gaming

Can any of the company-specific risk be diversified away by investing in both Champion Gaming and Galaxy 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 Champion Gaming and Galaxy Gaming 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 Galaxy Gaming, you can compare the effects of market volatilities on Champion Gaming and Galaxy 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 Champion Gaming with a short position of Galaxy Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Gaming and Galaxy Gaming.

Diversification Opportunities for Champion Gaming and Galaxy Gaming

-0.61

Correlation Coefficient

Champion Gaming  Galaxy Gaming

Excellent diversification

The 3 months correlation between Champion and Galaxy is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Champion Gaming Group and Galaxy Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Gaming 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 Galaxy Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Gaming has no effect on the direction of Champion Gaming i.e., Champion Gaming and Galaxy Gaming go up and down completely randomly.

Pair Corralation between Champion Gaming and Galaxy Gaming

Assuming the 90 days horizon Champion Gaming Group is expected to under-perform the Galaxy Gaming. In addition to that, Champion Gaming is 14.39 times more volatile than Galaxy Gaming. It trades about -0.13 of its total potential returns per unit of risk. Galaxy Gaming is currently generating about 0.09 per unit of volatility. If you would invest  273.00  in Galaxy Gaming on December 22, 2024 and sell it today you would earn a total of  12.00  from holding Galaxy Gaming or generate 4.4% return on investment over 90 days.

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

Champion Gaming Group  vs.  Galaxy Gaming

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 fragile 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.

Galaxy Gaming

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Gaming are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Galaxy Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Champion Gaming and Galaxy Gaming

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

The idea behind Champion Gaming Group and Galaxy Gaming 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.