Correlation Between FRACTAL GAMING and Nippon Steel

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

Diversification Opportunities for FRACTAL GAMING and Nippon Steel

0.91

Correlation Coefficient

FRACTAL GAMING  Nippon Steel

Almost no diversification

The 3 months correlation between FRACTAL and Nippon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding FRACTAL GAMING GROUP and Nippon Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Steel 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 Nippon Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Steel has no effect on the direction of FRACTAL GAMING i.e., FRACTAL GAMING and Nippon Steel go up and down completely randomly.

Pair Corralation between FRACTAL GAMING and Nippon Steel

Assuming the 90 days horizon FRACTAL GAMING GROUP is expected to generate 1.69 times more return on investment than Nippon Steel. However, FRACTAL GAMING is 1.69 times more volatile than Nippon Steel. It trades about 0.05 of its potential returns per unit of risk. Nippon Steel is currently generating about 0.01 per unit of risk. If you would invest  202.00  in FRACTAL GAMING GROUP on December 22, 2024 and sell it today you would earn a total of  132.00  from holding FRACTAL GAMING GROUP or generate 65.35% return on investment over 90 days.

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

FRACTAL GAMING GROUP  vs.  Nippon Steel

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 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FRACTAL GAMING reported solid returns over the last few months and may actually be approaching a breakup point.

Nippon Steel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nippon Steel are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Nippon Steel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FRACTAL GAMING and Nippon Steel

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

The idea behind FRACTAL GAMING GROUP and Nippon Steel 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.