Correlation Between FUTURE GAMING and Arch Capital
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and Arch Capital 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 FUTURE GAMING and Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUTURE GAMING GRP and Arch Capital Group, you can compare the effects of market volatilities on FUTURE GAMING and Arch Capital 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 FUTURE GAMING with a short position of Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and Arch Capital.
Diversification Opportunities for FUTURE GAMING and Arch Capital
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FUTURE and Arch is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group and FUTURE GAMING 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 FUTURE GAMING GRP are associated (or correlated) with Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and Arch Capital go up and down completely randomly.
Pair Corralation between FUTURE GAMING and Arch Capital
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to generate 3.92 times more return on investment than Arch Capital. However, FUTURE GAMING is 3.92 times more volatile than Arch Capital Group. It trades about 0.04 of its potential returns per unit of risk. Arch Capital Group is currently generating about 0.07 per unit of risk. If you would invest 44.00 in FUTURE GAMING GRP on August 30, 2024 and sell it today you would earn a total of 19.00 from holding FUTURE GAMING GRP or generate 43.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. Arch Capital Group
Performance |
| Timeline |
| FUTURE GAMING GRP |
| Arch Capital Group |
FUTURE GAMING and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and Arch Capital
The main advantage of trading using opposite FUTURE GAMING and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| FUTURE GAMING vs. Flutter Entertainment PLC | FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp |
| Arch Capital vs. Park Hotels Resorts | Arch Capital vs. Consolidated Communications Holdings | Arch Capital vs. Pebblebrook Hotel Trust | Arch Capital vs. NH HOTEL GROUP |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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