Correlation Between Biglari Holdings and Neogames

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

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

Diversification Opportunities for Biglari Holdings and Neogames

-0.68

Correlation Coefficient

Biglari Holdings  Neogames

Excellent diversification

The 3 months correlation between Biglari and Neogames is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Neogames SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogames SA and Biglari 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 Biglari Holdings are associated (or correlated) with Neogames. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogames SA has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Neogames go up and down completely randomly.

Pair Corralation between Biglari Holdings and Neogames

If you would invest  2,709  in Neogames SA on July 8, 2024 and sell it today you would earn a total of  0.00  from holding Neogames SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Biglari Holdings  vs.  Neogames SA

Biglari Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biglari Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Neogames SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogames SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Neogames is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Biglari Holdings and Neogames

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

The idea behind Biglari Holdings and Neogames 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.