Correlation Between Clean Motion and Gaming Corps

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Can any of the company-specific risk be diversified away by investing in both Clean Motion and Gaming Corps 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 Clean Motion and Gaming Corps into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Motion AB and Gaming Corps AB, you can compare the effects of market volatilities on Clean Motion and Gaming Corps 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 Clean Motion with a short position of Gaming Corps. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Motion and Gaming Corps.

Diversification Opportunities for Clean Motion and Gaming Corps

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Clean and Gaming is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Gaming Corps AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Corps AB and Clean Motion 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 Clean Motion AB are associated (or correlated) with Gaming Corps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Corps AB has no effect on the direction of Clean Motion i.e., Clean Motion and Gaming Corps go up and down completely randomly.

Pair Corralation between Clean Motion and Gaming Corps

Assuming the 90 days trading horizon Clean Motion AB is expected to generate 1.99 times more return on investment than Gaming Corps. However, Clean Motion is 1.99 times more volatile than Gaming Corps AB. It trades about 0.16 of its potential returns per unit of risk. Gaming Corps AB is currently generating about 0.23 per unit of risk. If you would invest  29.00  in Clean Motion AB on April 22, 2025 and sell it today you would earn a total of  21.00  from holding Clean Motion AB or generate 72.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Clean Motion AB  vs.  Gaming Corps AB

 Performance 
       Timeline  
Clean Motion AB 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Clean Motion AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Clean Motion unveiled solid returns over the last few months and may actually be approaching a breakup point.
Gaming Corps AB 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Corps AB are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gaming Corps unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clean Motion and Gaming Corps Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clean Motion and Gaming Corps

The main advantage of trading using opposite Clean Motion and Gaming Corps positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Motion position performs unexpectedly, Gaming Corps 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 Gaming Corps will offset losses from the drop in Gaming Corps' long position.
The idea behind Clean Motion AB and Gaming Corps AB 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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