Correlation Between Focus Home and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both Focus Home and FRACTAL 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 Focus Home and FRACTAL GAMING 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 FRACTAL GAMING GROUP, you can compare the effects of market volatilities on Focus Home and FRACTAL 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 Focus Home with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and FRACTAL GAMING.
Diversification Opportunities for Focus Home and FRACTAL GAMING
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Focus and FRACTAL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of Focus Home i.e., Focus Home and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between Focus Home and FRACTAL GAMING
Assuming the 90 days horizon Focus Home is expected to generate 1.61 times less return on investment than FRACTAL GAMING. In addition to that, Focus Home is 1.77 times more volatile than FRACTAL GAMING GROUP. It trades about 0.11 of its total potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.33 per unit of volatility. If you would invest 270.00 in FRACTAL GAMING GROUP on October 10, 2024 and sell it today you would earn a total of 39.00 from holding FRACTAL GAMING GROUP or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| Focus Home Interactive |
| FRACTAL GAMING GROUP |
Focus Home and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and FRACTAL GAMING
The main advantage of trading using opposite Focus Home and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, FRACTAL 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING'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 |
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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 the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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