Correlation Between Focus Home and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both Focus Home and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on Focus Home and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and BRIT AMER.
Diversification Opportunities for Focus Home and BRIT AMER
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and BRIT is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of Focus Home i.e., Focus Home and BRIT AMER go up and down completely randomly.
Pair Corralation between Focus Home and BRIT AMER
Assuming the 90 days horizon Focus Home Interactive is expected to under-perform the BRIT AMER. In addition to that, Focus Home is 3.84 times more volatile than BRIT AMER TOBACCO. It trades about -0.02 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.02 per unit of volatility. If you would invest 3,272 in BRIT AMER TOBACCO on September 26, 2024 and sell it today you would earn a total of 183.00 from holding BRIT AMER TOBACCO or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| Focus Home Interactive |
| BRIT AMER TOBACCO |
Focus Home and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and BRIT AMER
The main advantage of trading using opposite Focus Home and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| Focus Home vs. Nintendo Co | Focus Home vs. Sea Limited | Focus Home vs. Electronic Arts | Focus Home vs. NEXON Co |
| BRIT AMER vs. DISTRICT METALS | BRIT AMER vs. Focus Home Interactive | BRIT AMER vs. Autohome ADR | BRIT AMER vs. Kaiser Aluminum |
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 Correlations module to find global opportunities by holding instruments from different markets.
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