Correlation Between Champion Gaming and RadNet

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

Diversification Opportunities for Champion Gaming and RadNet

0.59

Correlation Coefficient

Champion Gaming  RadNet

Very weak diversification

The 3 months correlation between Champion and RadNet is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Champion Gaming Group and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc 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 RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of Champion Gaming i.e., Champion Gaming and RadNet go up and down completely randomly.

Pair Corralation between Champion Gaming and RadNet

Assuming the 90 days horizon Champion Gaming Group is expected to under-perform the RadNet. In addition to that, Champion Gaming is 8.42 times more volatile than RadNet Inc. It trades about -0.23 of its total potential returns per unit of risk. RadNet Inc is currently generating about -0.26 per unit of volatility. If you would invest  7,262  in RadNet Inc on October 24, 2024 and sell it today you would lose (889.00) from holding RadNet Inc or give up 12.24% of portfolio value over 90 days.

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

Champion Gaming Group  vs.  RadNet Inc

Champion Gaming Group

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

RadNet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Champion Gaming and RadNet

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

The idea behind Champion Gaming Group and RadNet Inc 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.