Correlation Between Sporttotal and Focus Home

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

By analyzing existing cross correlation between Sporttotal AG and Focus Home Interactive, you can compare the effects of market volatilities on Sporttotal and Focus Home 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 Sporttotal with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and Focus Home.

Diversification Opportunities for Sporttotal and Focus Home

0.13

Correlation Coefficient

Sporttotal  Focus Home

Average diversification

The 3 months correlation between Sporttotal and Focus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive and Sporttotal 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 Sporttotal AG are associated (or correlated) with Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of Sporttotal i.e., Sporttotal and Focus Home go up and down completely randomly.

Pair Corralation between Sporttotal and Focus Home

Assuming the 90 days trading horizon Sporttotal AG is expected to under-perform the Focus Home. In addition to that, Sporttotal is 1.15 times more volatile than Focus Home Interactive. It trades about -0.11 of its total potential returns per unit of risk. Focus Home Interactive is currently generating about 0.1 per unit of volatility. If you would invest  1,152  in Focus Home Interactive on September 15, 2024 and sell it today you would earn a total of  933.00  from holding Focus Home Interactive or generate 80.99% return on investment over 90 days.

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

Sporttotal AG  vs.  Focus Home Interactive

Sporttotal AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sporttotal AG 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Focus Home Interactive

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Home Interactive are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Focus Home may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sporttotal and Focus Home

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

The idea behind Sporttotal AG and Focus Home Interactive 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.