Correlation Between I3 Interactive and Gravity

Can any of the company-specific risk be diversified away by investing in both I3 Interactive and Gravity 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 I3 Interactive and Gravity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between i3 Interactive and Gravity Co, you can compare the effects of market volatilities on I3 Interactive and Gravity 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 I3 Interactive with a short position of Gravity. Check out your portfolio center. Please also check ongoing floating volatility patterns of I3 Interactive and Gravity.

Diversification Opportunities for I3 Interactive and Gravity

0.0

Correlation Coefficient

I3 Interactive  Gravity

Pay attention - limited upside

The 3 months correlation between BLITF and Gravity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding i3 Interactive and Gravity Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gravity and I3 Interactive 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 i3 Interactive are associated (or correlated) with Gravity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gravity has no effect on the direction of I3 Interactive i.e., I3 Interactive and Gravity go up and down completely randomly.

Pair Corralation between I3 Interactive and Gravity

Assuming the 90 days horizon i3 Interactive is expected to generate 133.81 times more return on investment than Gravity. However, I3 Interactive is 133.81 times more volatile than Gravity Co. It trades about 0.21 of its potential returns per unit of risk. Gravity Co is currently generating about -0.24 per unit of risk. If you would invest  0.00  in i3 Interactive on February 4, 2024 and sell it today you would earn a total of  0.00  from holding i3 Interactive or generate 9.223372036854776E16% return on investment over 90 days.

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

i3 Interactive  vs.  Gravity Co

i3 Interactive

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in i3 Interactive are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, I3 Interactive reported solid returns over the last few months and may actually be approaching a breakup point.

Gravity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gravity Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gravity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with I3 Interactive and Gravity

The main advantage of trading using opposite I3 Interactive and Gravity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I3 Interactive position performs unexpectedly, Gravity 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 Gravity will offset losses from the drop in Gravity's long position.

The idea behind i3 Interactive and Gravity Co 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.