Correlation Between British American and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both British American 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 British American and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on British American 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 British American with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and FRACTAL GAMING.
Diversification Opportunities for British American and FRACTAL GAMING
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between British and FRACTAL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco 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 British American 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 British American Tobacco 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 British American i.e., British American and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between British American and FRACTAL GAMING
Assuming the 90 days trading horizon British American Tobacco is expected to generate 0.4 times more return on investment than FRACTAL GAMING. However, British American Tobacco is 2.51 times less risky than FRACTAL GAMING. It trades about 0.15 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.03 per unit of risk. If you would invest 2,657 in British American Tobacco on November 7, 2024 and sell it today you would earn a total of 1,159 from holding British American Tobacco or generate 43.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| British American Tobacco |
| FRACTAL GAMING GROUP |
British American and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and FRACTAL GAMING
The main advantage of trading using opposite British American and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American 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.| British American vs. Tower Semiconductor | British American vs. ON SEMICONDUCTOR | British American vs. BE Semiconductor Industries | British American vs. SWISS WATER DECAFFCOFFEE |
| FRACTAL GAMING vs. CVS Health | FRACTAL GAMING vs. Molina Healthcare | FRACTAL GAMING vs. MPH Health Care | FRACTAL GAMING vs. Phibro Animal Health |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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