Correlation Between American Homes and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both American Homes 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 American Homes and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Homes 4 and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on American Homes 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 American Homes with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and FRACTAL GAMING.
Diversification Opportunities for American Homes and FRACTAL GAMING
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and FRACTAL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 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 American Homes 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 American Homes 4 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 American Homes i.e., American Homes and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between American Homes and FRACTAL GAMING
Assuming the 90 days trading horizon American Homes 4 is expected to under-perform the FRACTAL GAMING. But the stock apears to be less risky and, when comparing its historical volatility, American Homes 4 is 1.63 times less risky than FRACTAL GAMING. The stock trades about -0.1 of its potential returns per unit of risk. The FRACTAL GAMING GROUP is currently generating about 0.33 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Homes 4 vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| American Homes 4 |
| FRACTAL GAMING GROUP |
American Homes and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and FRACTAL GAMING
The main advantage of trading using opposite American Homes and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes 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.| American Homes vs. INVITATION HOMES DL | American Homes vs. Superior Plus Corp | American Homes vs. NMI Holdings | American Homes vs. SIVERS SEMICONDUCTORS AB |
| FRACTAL GAMING vs. CHINA EDUCATION GROUP | FRACTAL GAMING vs. INVITATION HOMES DL | FRACTAL GAMING vs. Corporate Office Properties | FRACTAL GAMING vs. EMBARK EDUCATION LTD |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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