Correlation Between Nexam Chemical and Fractal Gaming

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

By analyzing existing cross correlation between Nexam Chemical Holding and Fractal Gaming Group, you can compare the effects of market volatilities on Nexam Chemical and Fractal Gaming 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 Nexam Chemical with a short position of Fractal Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Fractal Gaming.

Diversification Opportunities for Nexam Chemical and Fractal Gaming

0.6

Correlation Coefficient

Nexam Chemical  Fractal Gaming

Poor diversification

The 3 months correlation between Nexam and Fractal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Fractal Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fractal Gaming Group and Nexam Chemical 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 Nexam Chemical Holding are associated (or correlated) with Fractal Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fractal Gaming Group has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Fractal Gaming go up and down completely randomly.

Pair Corralation between Nexam Chemical and Fractal Gaming

Assuming the 90 days trading horizon Nexam Chemical Holding is expected to under-perform the Fractal Gaming. In addition to that, Nexam Chemical is 1.68 times more volatile than Fractal Gaming Group. It trades about 0.0 of its total potential returns per unit of risk. Fractal Gaming Group is currently generating about 0.02 per unit of volatility. If you would invest  3,360  in Fractal Gaming Group on October 26, 2024 and sell it today you would earn a total of  40.00  from holding Fractal Gaming Group or generate 1.19% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Fractal Gaming Group

Nexam Chemical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexam Chemical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nexam Chemical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fractal Gaming Group

Risk-Adjusted Performance

1 of 100

Very 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.

Pair Trading with Nexam Chemical and Fractal Gaming

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

The idea behind Nexam Chemical Holding and Fractal Gaming Group 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 Anywhere module to track or share privately all of your investments from the convenience of any device.