Correlation Between Golden Matrix and GameSquare Holdings

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

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

Diversification Opportunities for Golden Matrix and GameSquare Holdings

-0.42

Correlation Coefficient

Golden Matrix  GameSquare Holdings

Very good diversification

The 3 months correlation between Golden and GameSquare is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and GameSquare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameSquare Holdings and Golden Matrix 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 Golden Matrix Group are associated (or correlated) with GameSquare Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameSquare Holdings has no effect on the direction of Golden Matrix i.e., Golden Matrix and GameSquare Holdings go up and down completely randomly.

Pair Corralation between Golden Matrix and GameSquare Holdings

Given the investment horizon of 90 days Golden Matrix Group is expected to generate 1.0 times more return on investment than GameSquare Holdings. However, Golden Matrix is 1.0 times more volatile than GameSquare Holdings. It trades about 0.46 of its potential returns per unit of risk. GameSquare Holdings is currently generating about -0.21 per unit of risk. If you would invest  249.00  in Golden Matrix Group on February 14, 2024 and sell it today you would earn a total of  270.00  from holding Golden Matrix Group or generate 108.43% return on investment over 90 days.

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

Golden Matrix Group  vs.  GameSquare Holdings

Golden Matrix Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Matrix Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Golden Matrix demonstrated solid returns over the last few months and may actually be approaching a breakup point.

GameSquare Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Golden Matrix and GameSquare Holdings

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

The idea behind Golden Matrix Group and GameSquare Holdings 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.