Correlation Between Fabrinet and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Esports Entertainment 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 Fabrinet and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and Esports Entertainment Group, you can compare the effects of market volatilities on Fabrinet and Esports Entertainment 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 Fabrinet with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Esports Entertainment.
Diversification Opportunities for Fabrinet and Esports Entertainment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fabrinet and Esports is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment and Fabrinet 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 Fabrinet are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of Fabrinet i.e., Fabrinet and Esports Entertainment go up and down completely randomly.
Pair Corralation between Fabrinet and Esports Entertainment
If you would invest 258.00 in Esports Entertainment Group on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Esports Entertainment Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Fabrinet vs. Esports Entertainment Group
Performance |
| Timeline |
| Fabrinet |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Fabrinet and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Esports Entertainment
The main advantage of trading using opposite Fabrinet and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Esports Entertainment 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.The idea behind Fabrinet and Esports Entertainment 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.| Esports Entertainment vs. Rush Street Interactive | Esports Entertainment vs. Everi Holdings | Esports Entertainment vs. Inspired Entertainment | Esports Entertainment vs. PointsBet Holdings Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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