Correlation Between Fortune Brands and Bet At

Can any of the company-specific risk be diversified away by investing in both Fortune Brands and Bet At 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 Fortune Brands and Bet At into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortune Brands Home and bet at home AG, you can compare the effects of market volatilities on Fortune Brands and Bet At 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 Fortune Brands with a short position of Bet At. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Brands and Bet At.

Diversification Opportunities for Fortune Brands and Bet At

-0.4

Correlation Coefficient

Fortune Brands  Bet At

Very good diversification

The 3 months correlation between Fortune and Bet is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Brands Home and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home and Fortune 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 Fortune Brands Home are associated (or correlated) with Bet At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of Fortune Brands i.e., Fortune Brands and Bet At go up and down completely randomly.

Pair Corralation between Fortune Brands and Bet At

Assuming the 90 days trading horizon Fortune Brands Home is expected to under-perform the Bet At. But the stock apears to be less risky and, when comparing its historical volatility, Fortune Brands Home is 1.54 times less risky than Bet At. The stock trades about -0.07 of its potential returns per unit of risk. The bet at home AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  255.00  in bet at home AG on December 22, 2024 and sell it today you would earn a total of  18.00  from holding bet at home AG or generate 7.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	69.84%
Values	Daily Returns

Fortune Brands Home  vs.  bet at home AG

Fortune Brands Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortune Brands Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

bet at home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in bet at home AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bet At may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fortune Brands and Bet At

The main advantage of trading using opposite Fortune Brands and Bet At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Brands position performs unexpectedly, Bet At 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 Bet At will offset losses from the drop in Bet At's long position.

The idea behind Fortune Brands Home and bet at home AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.