Correlation Between Micro Focus and Corsair Gaming

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

Diversification Opportunities for Micro Focus and Corsair Gaming

  Correlation Coefficient

Average diversification

The 3 months correlation between Micro and Corsair is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Micro Focus Intl and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and Micro Focus 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 Micro Focus Intl are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of Micro Focus i.e., Micro Focus and Corsair Gaming go up and down completely randomly.

Pair Corralation between Micro Focus and Corsair Gaming

Given the investment horizon of 90 days Micro Focus Intl is expected to generate 1.46 times more return on investment than Corsair Gaming. However, Micro Focus is 1.46 times more volatile than Corsair Gaming. It trades about 0.02 of its potential returns per unit of risk. Corsair Gaming is currently generating about -0.03 per unit of risk. If you would invest  572.00  in Micro Focus Intl on August 31, 2022 and sell it today you would earn a total of  46.00  from holding Micro Focus Intl or generate 8.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Micro Focus Intl  vs.  Corsair Gaming

 Performance (%) 
Micro Focus Intl 
Micro Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Micro Focus Intl are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Micro Focus is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the insiders.

Micro Price Channel

Corsair Gaming 
Corsair Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Corsair Gaming may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Corsair Price Channel

Micro Focus and Corsair Gaming Volatility Contrast

   Predicted Return Density   

Pair Trading with Micro Focus and Corsair Gaming

The main advantage of trading using opposite Micro Focus and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Focus position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.
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The idea behind Micro Focus Intl and Corsair Gaming 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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