Correlation Between Spirent Communications and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both Spirent Communications 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 Spirent Communications and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on Spirent Communications 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 Spirent Communications with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and FRACTAL GAMING.
Diversification Opportunities for Spirent Communications and FRACTAL GAMING
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spirent and FRACTAL is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc 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 Spirent Communications 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 Spirent Communications plc 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 Spirent Communications i.e., Spirent Communications and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between Spirent Communications and FRACTAL GAMING
Assuming the 90 days horizon Spirent Communications plc is expected to generate 1.73 times more return on investment than FRACTAL GAMING. However, Spirent Communications is 1.73 times more volatile than FRACTAL GAMING GROUP. It trades about 0.02 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about -0.01 per unit of risk. If you would invest 192.00 in Spirent Communications plc on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Spirent Communications plc or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| Spirent Communications |
| FRACTAL GAMING GROUP |
Spirent Communications and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and FRACTAL GAMING
The main advantage of trading using opposite Spirent Communications and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications 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.| Spirent Communications vs. T Mobile | Spirent Communications vs. ATT Inc | Spirent Communications vs. Deutsche Telekom AG |
| FRACTAL GAMING vs. AGF Management Limited | FRACTAL GAMING vs. Sumitomo Rubber Industries | FRACTAL GAMING vs. Plastic Omnium | FRACTAL GAMING vs. Applied Materials |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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