Correlation Between FRACTAL GAMING and CVB Financial

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

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

Diversification Opportunities for FRACTAL GAMING and CVB Financial

-0.6

Correlation Coefficient

FRACTAL GAMING  CVB Financial

Excellent diversification

The 3 months correlation between FRACTAL and CVB is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding FRACTAL GAMING GROUP and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp and FRACTAL GAMING 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 FRACTAL GAMING GROUP are associated (or correlated) with CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of FRACTAL GAMING i.e., FRACTAL GAMING and CVB Financial go up and down completely randomly.

Pair Corralation between FRACTAL GAMING and CVB Financial

Assuming the 90 days horizon FRACTAL GAMING GROUP is expected to generate 1.37 times more return on investment than CVB Financial. However, FRACTAL GAMING is 1.37 times more volatile than CVB Financial Corp. It trades about 0.34 of its potential returns per unit of risk. CVB Financial Corp is currently generating about -0.18 per unit of risk. If you would invest  270.00  in FRACTAL GAMING GROUP on October 10, 2024 and sell it today you would earn a total of  39.00  from holding FRACTAL GAMING GROUP or generate 14.44% return on investment over 90 days.

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

FRACTAL GAMING GROUP  vs.  CVB Financial Corp

FRACTAL GAMING GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FRACTAL GAMING GROUP are ranked lower than 3 (%) 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.

CVB Financial Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVB Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CVB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FRACTAL GAMING and CVB Financial

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

The idea behind FRACTAL GAMING GROUP and CVB Financial Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.