Correlation Between FAT Brands and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both FAT Brands and Esports Entertainment 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 FAT Brands and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAT Brands and Esports Entertainment Group, you can compare the effects of market volatilities on FAT Brands and Esports Entertainment 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 FAT Brands with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAT Brands and Esports Entertainment.
Diversification Opportunities for FAT Brands and Esports Entertainment
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FAT and Esports is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding FAT Brands and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment and FAT Brands 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 FAT Brands are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of FAT Brands i.e., FAT Brands and Esports Entertainment go up and down completely randomly.
Pair Corralation between FAT Brands and Esports Entertainment
If you would invest 932.00 in FAT Brands on August 28, 2024 and sell it today you would earn a total of 27.00 from holding FAT Brands or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
FAT Brands vs. Esports Entertainment Group
Performance |
| Timeline |
| FAT Brands |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FAT Brands and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAT Brands and Esports Entertainment
The main advantage of trading using opposite FAT Brands and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAT Brands position performs unexpectedly, Esports Entertainment 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.| FAT Brands vs. Fortress Biotech Pref | FAT Brands vs. FAT Brands | FAT Brands vs. Aquagold International | FAT Brands vs. Morningstar Unconstrained Allocation |
| Esports Entertainment vs. Soluna Holdings Preferred | Esports Entertainment vs. FAT Brands | Esports Entertainment vs. Fortress Biotech Pref |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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