Correlation Between Fractal Gaming and AroCell AB

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

Diversification Opportunities for Fractal Gaming and AroCell AB

0.74

Correlation Coefficient

Fractal Gaming  AroCell AB

Poor diversification

The 3 months correlation between Fractal and AroCell is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fractal Gaming Group and AroCell AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AroCell AB 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 AroCell AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AroCell AB has no effect on the direction of Fractal Gaming i.e., Fractal Gaming and AroCell AB go up and down completely randomly.

Pair Corralation between Fractal Gaming and AroCell AB

Assuming the 90 days trading horizon Fractal Gaming is expected to generate 2.55 times less return on investment than AroCell AB. But when comparing it to its historical volatility, Fractal Gaming Group is 1.96 times less risky than AroCell AB. It trades about 0.12 of its potential returns per unit of risk. AroCell AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  41.00  in AroCell AB on November 20, 2024 and sell it today you would earn a total of  20.00  from holding AroCell AB or generate 48.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

Fractal Gaming Group  vs.  AroCell AB

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 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fractal Gaming sustained solid returns over the last few months and may actually be approaching a breakup point.

AroCell AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AroCell AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AroCell AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fractal Gaming and AroCell AB

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

The idea behind Fractal Gaming Group and AroCell AB 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.