Correlation Between Fantasy Network and Beeio Honey

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

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

Diversification Opportunities for Fantasy Network and Beeio Honey

0.86

Correlation Coefficient

Fantasy Network  Beeio Honey

Very poor diversification

The 3 months correlation between Fantasy and Beeio is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fantasy Network and Beeio Honey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeio Honey and Fantasy Network 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 Fantasy Network are associated (or correlated) with Beeio Honey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeio Honey has no effect on the direction of Fantasy Network i.e., Fantasy Network and Beeio Honey go up and down completely randomly.

Pair Corralation between Fantasy Network and Beeio Honey

Assuming the 90 days trading horizon Fantasy Network is expected to under-perform the Beeio Honey. But the stock apears to be less risky and, when comparing its historical volatility, Fantasy Network is 1.99 times less risky than Beeio Honey. The stock trades about -0.07 of its potential returns per unit of risk. The Beeio Honey is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  26,820  in Beeio Honey on September 29, 2024 and sell it today you would lose (6,510) from holding Beeio Honey or give up 24.27% of portfolio value over 90 days.

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

Fantasy Network  vs.  Beeio Honey

Fantasy Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fantasy Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Beeio Honey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beeio Honey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fantasy Network and Beeio Honey

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

The idea behind Fantasy Network and Beeio Honey 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.