Correlation Between Fractal Gaming and Stillfront Group

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

Diversification Opportunities for Fractal Gaming and Stillfront Group

-0.58

Correlation Coefficient

Fractal Gaming  Stillfront Group

Excellent diversification

The 3 months correlation between Fractal and Stillfront is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fractal Gaming Group and Stillfront Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillfront Group 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 Stillfront Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillfront Group has no effect on the direction of Fractal Gaming i.e., Fractal Gaming and Stillfront Group go up and down completely randomly.

Pair Corralation between Fractal Gaming and Stillfront Group

Assuming the 90 days trading horizon Fractal Gaming Group is expected to generate 0.77 times more return on investment than Stillfront Group. However, Fractal Gaming Group is 1.31 times less risky than Stillfront Group. It trades about 0.13 of its potential returns per unit of risk. Stillfront Group AB is currently generating about -0.06 per unit of risk. If you would invest  3,150  in Fractal Gaming Group on December 1, 2024 and sell it today you would earn a total of  600.00  from holding Fractal Gaming Group or generate 19.05% return on investment over 90 days.

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

Fractal Gaming Group  vs.  Stillfront Group 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 10 (%) 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.

Stillfront Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stillfront Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Fractal Gaming and Stillfront Group

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

The idea behind Fractal Gaming Group and Stillfront Group 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.