Correlation Between Corsair Gaming and Forgame Holdings

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

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

Diversification Opportunities for Corsair Gaming and Forgame Holdings

0.43

Correlation Coefficient

Corsair Gaming  Forgame Holdings

Very weak diversification

The 3 months correlation between Corsair and Forgame is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and Forgame Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forgame Holdings and Corsair 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 Corsair Gaming are associated (or correlated) with Forgame Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forgame Holdings has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and Forgame Holdings go up and down completely randomly.

Pair Corralation between Corsair Gaming and Forgame Holdings

Assuming the 90 days horizon Corsair Gaming is expected to generate 1.24 times more return on investment than Forgame Holdings. However, Corsair Gaming is 1.24 times more volatile than Forgame Holdings. It trades about -0.02 of its potential returns per unit of risk. Forgame Holdings is currently generating about -0.04 per unit of risk. If you would invest  738.00  in Corsair Gaming on January 12, 2025 and sell it today you would lose (116.00) from holding Corsair Gaming or give up 15.72% of portfolio value over 90 days.

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

Corsair Gaming  vs.  Forgame Holdings

Corsair Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corsair Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Forgame Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forgame Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Corsair Gaming and Forgame Holdings

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

The idea behind Corsair Gaming and Forgame Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.