Correlation Between Corsair Gaming and Disney

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Can any of the company-specific risk be diversified away by investing in both Corsair Gaming and Disney 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 Corsair Gaming and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corsair Gaming and Walt Disney, you can compare the effects of market volatilities on Corsair Gaming and Disney 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 Corsair Gaming with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsair Gaming and Disney.

Diversification Opportunities for Corsair Gaming and Disney

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Corsair and Disney is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and Disney go up and down completely randomly.

Pair Corralation between Corsair Gaming and Disney

Given the investment horizon of 90 days Corsair Gaming is expected to under-perform the Disney. In addition to that, Corsair Gaming is 1.72 times more volatile than Walt Disney. It trades about -0.03 of its total potential returns per unit of risk. Walt Disney is currently generating about -0.05 per unit of volatility. If you would invest  17,912  in Walt Disney on August 29, 2022 and sell it today you would lose (8,025)  from holding Walt Disney or give up 44.8% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Corsair Gaming  vs.  Walt Disney

 Performance (%) 
       Timeline  
Corsair Gaming 
Corsair Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Corsair Price Channel

Walt Disney 
Disney Performance
0 of 100
Over the last 90 days Walt Disney has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Disney Price Channel

Corsair Gaming and Disney Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Corsair Gaming and Disney

The main advantage of trading using opposite Corsair Gaming and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corsair Gaming position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.
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The idea behind Corsair Gaming and Walt Disney 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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Check out your portfolio center. 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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