Correlation Between DAIMLER TRUCK and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both DAIMLER TRUCK 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 DAIMLER TRUCK and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIMLER TRUCK SPADS12 and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on DAIMLER TRUCK 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 DAIMLER TRUCK with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIMLER TRUCK and FRACTAL GAMING.
Diversification Opportunities for DAIMLER TRUCK and FRACTAL GAMING
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAIMLER and FRACTAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding DAIMLER TRUCK SPADS12 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 DAIMLER TRUCK 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 DAIMLER TRUCK SPADS12 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 DAIMLER TRUCK i.e., DAIMLER TRUCK and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between DAIMLER TRUCK and FRACTAL GAMING
Assuming the 90 days trading horizon DAIMLER TRUCK SPADS12 is expected to generate 1.24 times more return on investment than FRACTAL GAMING. However, DAIMLER TRUCK is 1.24 times more volatile than FRACTAL GAMING GROUP. It trades about -0.01 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about -0.08 per unit of risk. If you would invest 1,950 in DAIMLER TRUCK SPADS12 on September 5, 2024 and sell it today you would lose (160.00) from holding DAIMLER TRUCK SPADS12 or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAIMLER TRUCK SPADS12 vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| DAIMLER TRUCK SPADS12 |
| FRACTAL GAMING GROUP |
DAIMLER TRUCK and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIMLER TRUCK and FRACTAL GAMING
The main advantage of trading using opposite DAIMLER TRUCK and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIMLER TRUCK 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.| DAIMLER TRUCK vs. FRACTAL GAMING GROUP | DAIMLER TRUCK vs. QINGCI GAMES INC | DAIMLER TRUCK vs. Beazer Homes USA | DAIMLER TRUCK vs. DFS Furniture PLC |
| FRACTAL GAMING vs. HP Inc | FRACTAL GAMING vs. Dell Technologies | FRACTAL GAMING vs. Western Digital | FRACTAL GAMING vs. SEIKO EPSON PADR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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