Correlation Between REVO INSURANCE and BAKED GAMES

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

By analyzing existing cross correlation between REVO INSURANCE SPA and BAKED GAMES SA, you can compare the effects of market volatilities on REVO INSURANCE and BAKED GAMES 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 REVO INSURANCE with a short position of BAKED GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and BAKED GAMES.

Diversification Opportunities for REVO INSURANCE and BAKED GAMES

-0.46

Correlation Coefficient

REVO INSURANCE  BAKED GAMES

Very good diversification

The 3 months correlation between REVO and BAKED is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and BAKED GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKED GAMES SA and REVO INSURANCE 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 REVO INSURANCE SPA are associated (or correlated) with BAKED GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKED GAMES SA has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and BAKED GAMES go up and down completely randomly.

Pair Corralation between REVO INSURANCE and BAKED GAMES

Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 1.14 times more return on investment than BAKED GAMES. However, REVO INSURANCE is 1.14 times more volatile than BAKED GAMES SA. It trades about 0.1 of its potential returns per unit of risk. BAKED GAMES SA is currently generating about -0.05 per unit of risk. If you would invest  1,266  in REVO INSURANCE SPA on April 23, 2025 and sell it today you would earn a total of  226.00  from holding REVO INSURANCE SPA or generate 17.85% return on investment over 90 days.

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

REVO INSURANCE SPA  vs.  BAKED GAMES SA

REVO INSURANCE SPA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

BAKED GAMES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days BAKED GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Pair Trading with REVO INSURANCE and BAKED GAMES

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

The idea behind REVO INSURANCE SPA and BAKED GAMES SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.