Correlation Between Arena Group and FaZe Holdings

Can any of the company-specific risk be diversified away by investing in both Arena Group and FaZe Holdings 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 Arena Group and FaZe Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arena Group Holdings and FaZe Holdings, you can compare the effects of market volatilities on Arena Group and FaZe Holdings 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 Arena Group with a short position of FaZe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and FaZe Holdings.

Diversification Opportunities for Arena Group and FaZe Holdings

0.0

Correlation Coefficient

Arena Group  FaZe Holdings

Pay attention - limited upside

The 3 months correlation between Arena and FaZe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and FaZe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FaZe Holdings and Arena Group 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 Arena Group Holdings are associated (or correlated) with FaZe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FaZe Holdings has no effect on the direction of Arena Group i.e., Arena Group and FaZe Holdings go up and down completely randomly.

Pair Corralation between Arena Group and FaZe Holdings

If you would invest  150.00  in Arena Group Holdings on November 29, 2024 and sell it today you would earn a total of  1.00  from holding Arena Group Holdings or generate 0.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Arena Group Holdings  vs.  FaZe Holdings

Arena Group Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arena Group Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Arena Group may actually be approaching a critical reversion point that can send shares even higher in March 2025.

FaZe Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days FaZe Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FaZe Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Arena Group and FaZe Holdings

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

The idea behind Arena Group Holdings and FaZe Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.