Correlation Between AVITA Medical and FRACTAL GAMING

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

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

Diversification Opportunities for AVITA Medical and FRACTAL GAMING

-0.65

Correlation Coefficient

AVITA Medical  FRACTAL GAMING

Excellent diversification

The 3 months correlation between AVITA and FRACTAL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical 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 AVITA Medical 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 AVITA Medical 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 AVITA Medical i.e., AVITA Medical and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between AVITA Medical and FRACTAL GAMING

Assuming the 90 days trading horizon AVITA Medical is expected to generate 1.51 times more return on investment than FRACTAL GAMING. However, AVITA Medical is 1.51 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 0.03 per unit of risk. If you would invest  174.00  in AVITA Medical on October 26, 2024 and sell it today you would lose (12.00) from holding AVITA Medical or give up 6.9% of portfolio value over 90 days.

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

AVITA Medical  vs.  FRACTAL GAMING GROUP

AVITA Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AVITA Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, AVITA Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FRACTAL GAMING GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FRACTAL GAMING GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FRACTAL GAMING is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AVITA Medical and FRACTAL GAMING

The main advantage of trading using opposite AVITA Medical and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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 AVITA Medical 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.