Correlation Between FRACTAL GAMING and UNICREDIT SPA

Can any of the company-specific risk be diversified away by investing in both FRACTAL GAMING and UNICREDIT SPA 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 UNICREDIT SPA 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 UNICREDIT SPA ADR, you can compare the effects of market volatilities on FRACTAL GAMING and UNICREDIT SPA 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 UNICREDIT SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FRACTAL GAMING and UNICREDIT SPA.

Diversification Opportunities for FRACTAL GAMING and UNICREDIT SPA

0.56

Correlation Coefficient

FRACTAL GAMING  UNICREDIT SPA

Very weak diversification

The 3 months correlation between FRACTAL and UNICREDIT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding FRACTAL GAMING GROUP and UNICREDIT SPA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNICREDIT SPA ADR 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 UNICREDIT SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNICREDIT SPA ADR has no effect on the direction of FRACTAL GAMING i.e., FRACTAL GAMING and UNICREDIT SPA go up and down completely randomly.

Pair Corralation between FRACTAL GAMING and UNICREDIT SPA

Assuming the 90 days horizon FRACTAL GAMING is expected to generate 1.72 times less return on investment than UNICREDIT SPA. In addition to that, FRACTAL GAMING is 1.25 times more volatile than UNICREDIT SPA ADR. It trades about 0.14 of its total potential returns per unit of risk. UNICREDIT SPA ADR is currently generating about 0.3 per unit of volatility. If you would invest  1,900  in UNICREDIT SPA ADR on December 31, 2024 and sell it today you would earn a total of  760.00  from holding UNICREDIT SPA ADR or generate 40.0% return on investment over 90 days.

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

FRACTAL GAMING GROUP  vs.  UNICREDIT SPA ADR

FRACTAL GAMING GROUP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FRACTAL GAMING GROUP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FRACTAL GAMING reported solid returns over the last few months and may actually be approaching a breakup point.

UNICREDIT SPA ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNICREDIT SPA ADR are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, UNICREDIT SPA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FRACTAL GAMING and UNICREDIT SPA

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

The idea behind FRACTAL GAMING GROUP and UNICREDIT SPA ADR 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.