Correlation Between China SXT and Motorsport Gaming

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

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

Diversification Opportunities for China SXT and Motorsport Gaming

-0.45

Correlation Coefficient

China SXT  Motorsport Gaming

Very good diversification

The 3 months correlation between China and Motorsport is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding China SXT Pharmaceuticals and Motorsport Gaming Us in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorsport Gaming and China SXT 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 China SXT Pharmaceuticals are associated (or correlated) with Motorsport Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorsport Gaming has no effect on the direction of China SXT i.e., China SXT and Motorsport Gaming go up and down completely randomly.

Pair Corralation between China SXT and Motorsport Gaming

Given the investment horizon of 90 days China SXT is expected to generate 13.77 times less return on investment than Motorsport Gaming. In addition to that, China SXT is 2.37 times more volatile than Motorsport Gaming Us. It trades about 0.0 of its total potential returns per unit of risk. Motorsport Gaming Us is currently generating about 0.1 per unit of volatility. If you would invest  250.00  in Motorsport Gaming Us on May 6, 2025 and sell it today you would earn a total of  62.00  from holding Motorsport Gaming Us or generate 24.8% return on investment over 90 days.

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

China SXT Pharmaceuticals  vs.  Motorsport Gaming Us

China SXT Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days China SXT Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, China SXT is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Motorsport Gaming

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Motorsport Gaming Us are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Motorsport Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China SXT and Motorsport Gaming

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

The idea behind China SXT Pharmaceuticals and Motorsport Gaming Us 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.