Correlation Between FAIR ISAAC and MOVIE GAMES

Can any of the company-specific risk be diversified away by investing in both FAIR ISAAC and MOVIE GAMES 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 FAIR ISAAC and MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FAIR ISAAC and MOVIE GAMES SA, you can compare the effects of market volatilities on FAIR ISAAC and MOVIE GAMES 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 FAIR ISAAC with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAIR ISAAC and MOVIE GAMES.

Diversification Opportunities for FAIR ISAAC and MOVIE GAMES

-0.49

Correlation Coefficient

FAIR ISAAC  MOVIE GAMES

Very good diversification

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

Pair Corralation between FAIR ISAAC and MOVIE GAMES

Assuming the 90 days trading horizon FAIR ISAAC is expected to generate 0.48 times more return on investment than MOVIE GAMES. However, FAIR ISAAC is 2.09 times less risky than MOVIE GAMES. It trades about 0.13 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.0 per unit of risk. If you would invest  57,500  in FAIR ISAAC on October 11, 2024 and sell it today you would earn a total of  128,600  from holding FAIR ISAAC or generate 223.65% return on investment over 90 days.

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

FAIR ISAAC  vs.  MOVIE GAMES SA

FAIR ISAAC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FAIR ISAAC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, FAIR ISAAC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

MOVIE GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOVIE GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FAIR ISAAC and MOVIE GAMES

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

The idea behind FAIR ISAAC and MOVIE GAMES SA 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 Global Correlations module to find global opportunities by holding instruments from different markets.