Correlation Between NEW MILLENNIUM and FRACTAL GAMING

Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM 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 NEW MILLENNIUM and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEW MILLENNIUM IRON and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on NEW MILLENNIUM 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 NEW MILLENNIUM with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and FRACTAL GAMING.

Diversification Opportunities for NEW MILLENNIUM and FRACTAL GAMING

-0.32

Correlation Coefficient

NEW MILLENNIUM  FRACTAL GAMING

Very good diversification

The 3 months correlation between NEW and FRACTAL is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON 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 NEW MILLENNIUM 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 NEW MILLENNIUM IRON 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 NEW MILLENNIUM i.e., NEW MILLENNIUM and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between NEW MILLENNIUM and FRACTAL GAMING

Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to under-perform the FRACTAL GAMING. But the stock apears to be less risky and, when comparing its historical volatility, NEW MILLENNIUM IRON is 1.03 times less risky than FRACTAL GAMING. The stock trades about -0.04 of its potential returns per unit of risk. The FRACTAL GAMING GROUP is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  270.00  in FRACTAL GAMING GROUP on October 8, 2024 and sell it today you would earn a total of  30.00  from holding FRACTAL GAMING GROUP or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NEW MILLENNIUM IRON  vs.  FRACTAL GAMING GROUP

NEW MILLENNIUM IRON

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NEW MILLENNIUM IRON are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NEW MILLENNIUM may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FRACTAL GAMING GROUP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FRACTAL GAMING GROUP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FRACTAL GAMING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NEW MILLENNIUM and FRACTAL GAMING

The main advantage of trading using opposite NEW MILLENNIUM and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM 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.

The idea behind NEW MILLENNIUM IRON and FRACTAL GAMING GROUP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.