Correlation Between Fractal Gaming and Svenska Handelsbanken

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

Diversification Opportunities for Fractal Gaming and Svenska Handelsbanken

-0.49

Correlation Coefficient

Fractal Gaming  Svenska Handelsbanken

Very good diversification

The 3 months correlation between Fractal and Svenska is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fractal Gaming Group and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken 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 Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Fractal Gaming i.e., Fractal Gaming and Svenska Handelsbanken go up and down completely randomly.

Pair Corralation between Fractal Gaming and Svenska Handelsbanken

Assuming the 90 days trading horizon Fractal Gaming Group is expected to under-perform the Svenska Handelsbanken. But the stock apears to be less risky and, when comparing its historical volatility, Fractal Gaming Group is 1.08 times less risky than Svenska Handelsbanken. The stock trades about -0.07 of its potential returns per unit of risk. The Svenska Handelsbanken AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  10,645  in Svenska Handelsbanken AB on September 1, 2024 and sell it today you would earn a total of  705.00  from holding Svenska Handelsbanken AB or generate 6.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

Fractal Gaming Group  vs.  Svenska Handelsbanken AB

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 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.

Svenska Handelsbanken

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Svenska Handelsbanken may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Fractal Gaming and Svenska Handelsbanken

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

The idea behind Fractal Gaming Group and Svenska Handelsbanken 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.