Correlation Between FRACTAL GAMING and WESTERN DIGITAL

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

Diversification Opportunities for FRACTAL GAMING and WESTERN DIGITAL

-0.28

Correlation Coefficient

FRACTAL GAMING  WESTERN DIGITAL

Very good diversification

The 3 months correlation between FRACTAL and WESTERN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding FRACTAL GAMING GROUP and WESTERN DIGITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN DIGITAL 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 WESTERN DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN DIGITAL has no effect on the direction of FRACTAL GAMING i.e., FRACTAL GAMING and WESTERN DIGITAL go up and down completely randomly.

Pair Corralation between FRACTAL GAMING and WESTERN DIGITAL

Assuming the 90 days horizon FRACTAL GAMING GROUP is expected to generate 0.6 times more return on investment than WESTERN DIGITAL. However, FRACTAL GAMING GROUP is 1.67 times less risky than WESTERN DIGITAL. It trades about 0.16 of its potential returns per unit of risk. WESTERN DIGITAL is currently generating about -0.12 per unit of risk. If you would invest  267.00  in FRACTAL GAMING GROUP on December 21, 2024 and sell it today you would earn a total of  67.00  from holding FRACTAL GAMING GROUP or generate 25.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

FRACTAL GAMING GROUP  vs.  WESTERN DIGITAL

FRACTAL GAMING GROUP

Risk-Adjusted Performance

OK

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.

WESTERN DIGITAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days WESTERN DIGITAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FRACTAL GAMING and WESTERN DIGITAL

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

The idea behind FRACTAL GAMING GROUP and WESTERN DIGITAL 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.