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

0.22

Correlation Coefficient

Fractal Gaming  Svenska Handelsbanken

Modest diversification

The 3 months correlation between Fractal and Svenska is 0.22. 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 is expected to generate 7.92 times less return on investment than Svenska Handelsbanken. In addition to that, Fractal Gaming is 1.73 times more volatile than Svenska Handelsbanken AB. It trades about 0.02 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.28 per unit of volatility. If you would invest  14,300  in Svenska Handelsbanken AB on October 26, 2024 and sell it today you would earn a total of  2,560  from holding Svenska Handelsbanken AB or generate 17.9% return on investment over 90 days.

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

Fractal Gaming Group  vs.  Svenska Handelsbanken AB

Fractal Gaming Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fractal Gaming Group are ranked lower than 1 (%) 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.

Svenska Handelsbanken

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Svenska Handelsbanken unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.