Correlation Between COMMONWBK AUSTRSPADRS and FRACTAL GAMING

Can any of the company-specific risk be diversified away by investing in both COMMONWBK AUSTRSPADRS and FRACTAL GAMING 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 COMMONWBK AUSTRSPADRS and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COMMONWBK AUSTRSPADRS and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on COMMONWBK AUSTRSPADRS and FRACTAL GAMING 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 COMMONWBK AUSTRSPADRS with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMONWBK AUSTRSPADRS and FRACTAL GAMING.

Diversification Opportunities for COMMONWBK AUSTRSPADRS and FRACTAL GAMING

-0.92

Correlation Coefficient

COMMONWBK AUSTRSPADRS  FRACTAL GAMING

Pay attention - limited upside

The 3 months correlation between COMMONWBK and FRACTAL is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding COMMONWBK AUSTRSPADRS and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP and COMMONWBK AUSTRSPADRS 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 COMMONWBK AUSTRSPADRS are associated (or correlated) with FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of COMMONWBK AUSTRSPADRS i.e., COMMONWBK AUSTRSPADRS and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between COMMONWBK AUSTRSPADRS and FRACTAL GAMING

Assuming the 90 days trading horizon COMMONWBK AUSTRSPADRS is expected to generate 0.51 times more return on investment than FRACTAL GAMING. However, COMMONWBK AUSTRSPADRS is 1.95 times less risky than FRACTAL GAMING. It trades about 0.11 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.0 per unit of risk. If you would invest  5,884  in COMMONWBK AUSTRSPADRS on September 12, 2024 and sell it today you would earn a total of  3,616  from holding COMMONWBK AUSTRSPADRS or generate 61.45% return on investment over 90 days.

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

COMMONWBK AUSTRSPADRS  vs.  FRACTAL GAMING GROUP

COMMONWBK AUSTRSPADRS

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COMMONWBK AUSTRSPADRS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COMMONWBK AUSTRSPADRS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

FRACTAL GAMING GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FRACTAL GAMING GROUP 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 COMMONWBK AUSTRSPADRS and FRACTAL GAMING

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

The idea behind COMMONWBK AUSTRSPADRS and FRACTAL GAMING GROUP 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.