Correlation Between Champion Gaming and 50247VAC3

Can any of the company-specific risk be diversified away by investing in both Champion Gaming and 50247VAC3 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 50247VAC3 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 LYB INTL FIN, you can compare the effects of market volatilities on Champion Gaming and 50247VAC3 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 50247VAC3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Gaming and 50247VAC3.

Diversification Opportunities for Champion Gaming and 50247VAC3

0.25

Correlation Coefficient

Champion Gaming  50247VAC3

Modest diversification

The 3 months correlation between Champion and 50247VAC3 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Champion Gaming Group and LYB INTL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTL FIN 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 50247VAC3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTL FIN has no effect on the direction of Champion Gaming i.e., Champion Gaming and 50247VAC3 go up and down completely randomly.

Pair Corralation between Champion Gaming and 50247VAC3

Assuming the 90 days horizon Champion Gaming is expected to generate 532.94 times less return on investment than 50247VAC3. But when comparing it to its historical volatility, Champion Gaming Group is 11.55 times less risky than 50247VAC3. It trades about 0.0 of its potential returns per unit of risk. LYB INTL FIN is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,094  in LYB INTL FIN on October 23, 2024 and sell it today you would lose (400.00) from holding LYB INTL FIN or give up 4.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.14%
Values	Daily Returns

Champion Gaming Group  vs.  LYB INTL FIN

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 unfluctuating 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.

LYB INTL FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTL FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50247VAC3 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 50247VAC3

The main advantage of trading using opposite Champion Gaming and 50247VAC3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Gaming position performs unexpectedly, 50247VAC3 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 50247VAC3 will offset losses from the drop in 50247VAC3's long position.

The idea behind Champion Gaming Group and LYB INTL FIN 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..