Correlation Between Fractal Gaming and Episurf Medical

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

Diversification Opportunities for Fractal Gaming and Episurf Medical

-0.04

Correlation Coefficient

Fractal Gaming  Episurf Medical

Good diversification

The 3 months correlation between Fractal and Episurf is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fractal Gaming Group and Episurf Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episurf Medical 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 Episurf Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episurf Medical AB has no effect on the direction of Fractal Gaming i.e., Fractal Gaming and Episurf Medical go up and down completely randomly.

Pair Corralation between Fractal Gaming and Episurf Medical

Assuming the 90 days trading horizon Fractal Gaming Group is expected to generate 0.3 times more return on investment than Episurf Medical. However, Fractal Gaming Group is 3.39 times less risky than Episurf Medical. It trades about 0.21 of its potential returns per unit of risk. Episurf Medical AB is currently generating about 0.03 per unit of risk. If you would invest  3,260  in Fractal Gaming Group on October 11, 2024 and sell it today you would earn a total of  270.00  from holding Fractal Gaming Group or generate 8.28% return on investment over 90 days.

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

Fractal Gaming Group  vs.  Episurf Medical AB

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 somewhat strong basic indicators, Fractal Gaming is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Episurf Medical AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Episurf Medical AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Episurf Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fractal Gaming and Episurf Medical

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

The idea behind Fractal Gaming Group and Episurf Medical 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.