Correlation Between Focus Home and Major Drilling
Can any of the company-specific risk be diversified away by investing in both Focus Home and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on Focus Home and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and Major Drilling.
Diversification Opportunities for Focus Home and Major Drilling
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Focus and Major is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of Focus Home i.e., Focus Home and Major Drilling go up and down completely randomly.
Pair Corralation between Focus Home and Major Drilling
Assuming the 90 days horizon Focus Home is expected to generate 14.27 times less return on investment than Major Drilling. In addition to that, Focus Home is 1.46 times more volatile than Major Drilling Group. It trades about 0.0 of its total potential returns per unit of risk. Major Drilling Group is currently generating about 0.06 per unit of volatility. If you would invest 550.00 in Major Drilling Group on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Major Drilling Group or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. Major Drilling Group
Performance |
| Timeline |
| Focus Home Interactive |
| Major Drilling Group |
Focus Home and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and Major Drilling
The main advantage of trading using opposite Focus Home and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| Focus Home vs. NEXON Co | Focus Home vs. Take Two Interactive Software | Focus Home vs. Superior Plus Corp | Focus Home vs. SIVERS SEMICONDUCTORS AB |
| Major Drilling vs. BHP Group Limited | Major Drilling vs. Vale SA | Major Drilling vs. Superior Plus Corp | Major Drilling vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance |