Correlation Between Focus Home and ACCOR SPADR
Can any of the company-specific risk be diversified away by investing in both Focus Home and ACCOR SPADR 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 ACCOR SPADR 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 ACCOR SPADR NEW, you can compare the effects of market volatilities on Focus Home and ACCOR SPADR 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 ACCOR SPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and ACCOR SPADR.
Diversification Opportunities for Focus Home and ACCOR SPADR
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Focus and ACCOR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and ACCOR SPADR NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCOR SPADR NEW 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 ACCOR SPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCOR SPADR NEW has no effect on the direction of Focus Home i.e., Focus Home and ACCOR SPADR go up and down completely randomly.
Pair Corralation between Focus Home and ACCOR SPADR
Assuming the 90 days horizon Focus Home Interactive is expected to generate 2.34 times more return on investment than ACCOR SPADR. However, Focus Home is 2.34 times more volatile than ACCOR SPADR NEW. It trades about 0.1 of its potential returns per unit of risk. ACCOR SPADR NEW is currently generating about 0.2 per unit of risk. If you would invest 1,950 in Focus Home Interactive on September 15, 2024 and sell it today you would earn a total of 135.00 from holding Focus Home Interactive or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. ACCOR SPADR NEW
Performance |
| Timeline |
| Focus Home Interactive |
| ACCOR SPADR NEW |
Focus Home and ACCOR SPADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and ACCOR SPADR
The main advantage of trading using opposite Focus Home and ACCOR SPADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, ACCOR SPADR 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 ACCOR SPADR will offset losses from the drop in ACCOR SPADR'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 |
| ACCOR SPADR vs. Focus Home Interactive | ACCOR SPADR vs. Tri Pointe Homes | ACCOR SPADR vs. BURLINGTON STORES | ACCOR SPADR vs. bet at home AG |
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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