Correlation Between Fragbite Group and Gapwaves

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

By analyzing existing cross correlation between Fragbite Group AB and Gapwaves AB Series, you can compare the effects of market volatilities on Fragbite Group and Gapwaves 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 Fragbite Group with a short position of Gapwaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fragbite Group and Gapwaves.

Diversification Opportunities for Fragbite Group and Gapwaves

0.19

Correlation Coefficient

Fragbite Group  Gapwaves

Average diversification

The 3 months correlation between Fragbite and Gapwaves is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fragbite Group AB and Gapwaves AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gapwaves AB Series and Fragbite Group 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 Fragbite Group AB are associated (or correlated) with Gapwaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gapwaves AB Series has no effect on the direction of Fragbite Group i.e., Fragbite Group and Gapwaves go up and down completely randomly.

Pair Corralation between Fragbite Group and Gapwaves

Assuming the 90 days trading horizon Fragbite Group AB is expected to generate 9.5 times more return on investment than Gapwaves. However, Fragbite Group is 9.5 times more volatile than Gapwaves AB Series. It trades about 0.1 of its potential returns per unit of risk. Gapwaves AB Series is currently generating about 0.03 per unit of risk. If you would invest  780.00  in Fragbite Group AB on April 24, 2025 and sell it today you would earn a total of  415.00  from holding Fragbite Group AB or generate 53.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Fragbite Group AB  vs.  Gapwaves AB Series

Fragbite Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fragbite Group AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fragbite Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gapwaves AB Series

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gapwaves AB Series are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Gapwaves is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fragbite Group and Gapwaves

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

The idea behind Fragbite Group AB and Gapwaves AB Series 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.