Correlation Between Forgame Holdings and ViacomCBS

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

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

Diversification Opportunities for Forgame Holdings and ViacomCBS

0.1

Correlation Coefficient

Forgame Holdings  ViacomCBS

Average diversification

The 3 months correlation between Forgame and ViacomCBS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Forgame Holdings and ViacomCBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViacomCBS and Forgame Holdings 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 Forgame Holdings are associated (or correlated) with ViacomCBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViacomCBS has no effect on the direction of Forgame Holdings i.e., Forgame Holdings and ViacomCBS go up and down completely randomly.

Pair Corralation between Forgame Holdings and ViacomCBS

Assuming the 90 days trading horizon Forgame Holdings is expected to generate 3.95 times more return on investment than ViacomCBS. However, Forgame Holdings is 3.95 times more volatile than ViacomCBS. It trades about 0.1 of its potential returns per unit of risk. ViacomCBS is currently generating about 0.0 per unit of risk. If you would invest  7.35  in Forgame Holdings on April 23, 2025 and sell it today you would earn a total of  1.40  from holding Forgame Holdings or generate 19.05% return on investment over 90 days.

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

Forgame Holdings  vs.  ViacomCBS

Forgame Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Forgame Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Forgame Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

ViacomCBS

Risk-Adjusted Performance

Weak

Over the last 90 days ViacomCBS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ViacomCBS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Forgame Holdings and ViacomCBS

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

The idea behind Forgame Holdings and ViacomCBS 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.