Correlation Between Focus Home and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both Focus Home and MOVIE GAMES 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 Focus Home and MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and MOVIE GAMES SA, you can compare the effects of market volatilities on Focus Home and MOVIE GAMES 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 Focus Home with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and MOVIE GAMES.
Diversification Opportunities for Focus Home and MOVIE GAMES
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Focus and MOVIE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and Focus Home 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 Focus Home Interactive are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of Focus Home i.e., Focus Home and MOVIE GAMES go up and down completely randomly.
Pair Corralation between Focus Home and MOVIE GAMES
Assuming the 90 days horizon Focus Home Interactive is expected to generate 0.55 times more return on investment than MOVIE GAMES. However, Focus Home Interactive is 1.82 times less risky than MOVIE GAMES. It trades about 0.11 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.04 per unit of risk. If you would invest 2,135 in Focus Home Interactive on October 10, 2024 and sell it today you would earn a total of 160.00 from holding Focus Home Interactive or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. MOVIE GAMES SA
Performance |
| Timeline |
| Focus Home Interactive |
| MOVIE GAMES SA |
Focus Home and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and MOVIE GAMES
The main advantage of trading using opposite Focus Home and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| Focus Home vs. Goosehead Insurance | Focus Home vs. QBE Insurance Group | Focus Home vs. Japan Post Insurance | Focus Home vs. Singapore Reinsurance |
| MOVIE GAMES vs. Kingdee International Software | MOVIE GAMES vs. Uber Technologies | MOVIE GAMES vs. Harmony Gold Mining | MOVIE GAMES vs. SOFI TECHNOLOGIES |
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 the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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