Correlation Between ImagineAR and Fandom Sports

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

By analyzing existing cross correlation between ImagineAR and Fandom Sports Media, you can compare the effects of market volatilities on ImagineAR and Fandom Sports 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 ImagineAR with a short position of Fandom Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of ImagineAR and Fandom Sports.

Diversification Opportunities for ImagineAR and Fandom Sports

-0.33

Correlation Coefficient

ImagineAR  Fandom Sports

Very good diversification

The 3 months correlation between ImagineAR and Fandom is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ImagineAR and Fandom Sports Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fandom Sports Media and ImagineAR 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 ImagineAR are associated (or correlated) with Fandom Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fandom Sports Media has no effect on the direction of ImagineAR i.e., ImagineAR and Fandom Sports go up and down completely randomly.

Pair Corralation between ImagineAR and Fandom Sports

Assuming the 90 days horizon ImagineAR is expected to under-perform the Fandom Sports. But the otc stock apears to be less risky and, when comparing its historical volatility, ImagineAR is 28.93 times less risky than Fandom Sports. The otc stock trades about -0.01 of its potential returns per unit of risk. The Fandom Sports Media is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  0.40  in Fandom Sports Media on November 29, 2024 and sell it today you would lose (0.37) from holding Fandom Sports Media or give up 92.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

ImagineAR  vs.  Fandom Sports Media

ImagineAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days ImagineAR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Fandom Sports Media

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fandom Sports Media are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Fandom Sports reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ImagineAR and Fandom Sports

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

The idea behind ImagineAR and Fandom Sports Media 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.