Correlation Between Focus Home and SILVER BULLET
Can any of the company-specific risk be diversified away by investing in both Focus Home and SILVER BULLET 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 SILVER BULLET 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 SILVER BULLET DATA, you can compare the effects of market volatilities on Focus Home and SILVER BULLET 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 SILVER BULLET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and SILVER BULLET.
Diversification Opportunities for Focus Home and SILVER BULLET
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Focus and SILVER is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and SILVER BULLET DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILVER BULLET DATA 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 SILVER BULLET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILVER BULLET DATA has no effect on the direction of Focus Home i.e., Focus Home and SILVER BULLET go up and down completely randomly.
Pair Corralation between Focus Home and SILVER BULLET
Assuming the 90 days horizon Focus Home Interactive is expected to generate 1.1 times more return on investment than SILVER BULLET. However, Focus Home is 1.1 times more volatile than SILVER BULLET DATA. It trades about 0.1 of its potential returns per unit of risk. SILVER BULLET DATA is currently generating about -0.02 per unit of risk. If you would invest 1,146 in Focus Home Interactive on October 17, 2024 and sell it today you would earn a total of 984.00 from holding Focus Home Interactive or generate 85.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Focus Home Interactive vs. SILVER BULLET DATA
Performance |
| Timeline |
| Focus Home Interactive |
| SILVER BULLET DATA |
Focus Home and SILVER BULLET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and SILVER BULLET
The main advantage of trading using opposite Focus Home and SILVER BULLET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, SILVER BULLET 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 SILVER BULLET will offset losses from the drop in SILVER BULLET's long position.| Focus Home vs. SQUIRREL MEDIA SA | Focus Home vs. Agilent Technologies | Focus Home vs. Addtech AB | Focus Home vs. Townsquare Media |
| SILVER BULLET vs. GAMING FAC SA | SILVER BULLET vs. PENN NATL GAMING | SILVER BULLET vs. GAMESTOP | SILVER BULLET vs. Focus Home Interactive |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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