Correlation Between LEO Token and GAMEC

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

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

Diversification Opportunities for LEO Token and GAMEC

-0.7

Correlation Coefficient

LEO Token  GAMEC

Excellent diversification

The 3 months correlation between LEO and GAMEC is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding LEO Token and GAMEC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMEC and LEO Token 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 LEO Token are associated (or correlated) with GAMEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMEC has no effect on the direction of LEO Token i.e., LEO Token and GAMEC go up and down completely randomly.

Pair Corralation between LEO Token and GAMEC

Assuming the 90 days trading horizon LEO Token is expected to generate 0.48 times more return on investment than GAMEC. However, LEO Token is 2.08 times less risky than GAMEC. It trades about 0.09 of its potential returns per unit of risk. GAMEC is currently generating about -0.03 per unit of risk. If you would invest  378.00  in LEO Token on August 23, 2024 and sell it today you would earn a total of  463.00  from holding LEO Token or generate 122.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	44.48%
Values	Daily Returns

LEO Token  vs.  GAMEC

LEO Token

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LEO Token are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, LEO Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

GAMEC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMEC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for GAMEC shareholders.

Pair Trading with LEO Token and GAMEC

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

The idea behind LEO Token and GAMEC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.