Correlation Between FRACTAL GAMING and Treasury Wine

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

Diversification Opportunities for FRACTAL GAMING and Treasury Wine

0.53

Correlation Coefficient

FRACTAL GAMING  Treasury Wine

Very weak diversification

The 3 months correlation between FRACTAL and Treasury is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding FRACTAL GAMING GROUP and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of FRACTAL GAMING i.e., FRACTAL GAMING and Treasury Wine go up and down completely randomly.

Pair Corralation between FRACTAL GAMING and Treasury Wine

Assuming the 90 days horizon FRACTAL GAMING GROUP is expected to generate 1.8 times more return on investment than Treasury Wine. However, FRACTAL GAMING is 1.8 times more volatile than Treasury Wine Estates. It trades about 0.25 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.08 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  30.00  from holding FRACTAL GAMING GROUP or generate 11.11% 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.  Treasury Wine Estates

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.

Treasury Wine Estates

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with FRACTAL GAMING and Treasury Wine

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

The idea behind FRACTAL GAMING GROUP and Treasury Wine Estates 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.