Correlation Between FARO Technologies and PLAYSTUDIOS

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

By analyzing existing cross correlation between FARO Technologies and PLAYSTUDIOS A DL 0001, you can compare the effects of market volatilities on FARO Technologies and PLAYSTUDIOS 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 FARO Technologies with a short position of PLAYSTUDIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and PLAYSTUDIOS.

Diversification Opportunities for FARO Technologies and PLAYSTUDIOS

0.85

Correlation Coefficient

FARO Technologies  PLAYSTUDIOS

Very poor diversification

The 3 months correlation between FARO and PLAYSTUDIOS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies and PLAYSTUDIOS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS A DL and FARO Technologies 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 FARO Technologies are associated (or correlated) with PLAYSTUDIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYSTUDIOS A DL has no effect on the direction of FARO Technologies i.e., FARO Technologies and PLAYSTUDIOS go up and down completely randomly.

Pair Corralation between FARO Technologies and PLAYSTUDIOS

Assuming the 90 days horizon FARO Technologies is expected to generate 1.21 times more return on investment than PLAYSTUDIOS. However, FARO Technologies is 1.21 times more volatile than PLAYSTUDIOS A DL 0001. It trades about 0.01 of its potential returns per unit of risk. PLAYSTUDIOS A DL 0001 is currently generating about -0.03 per unit of risk. If you would invest  2,922  in FARO Technologies on September 1, 2024 and sell it today you would lose (442.00) from holding FARO Technologies or give up 15.13% of portfolio value over 90 days.

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

FARO Technologies  vs.  PLAYSTUDIOS A DL 0001

FARO Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FARO Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FARO Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

PLAYSTUDIOS A DL

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYSTUDIOS A DL 0001 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PLAYSTUDIOS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FARO Technologies and PLAYSTUDIOS

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

The idea behind FARO Technologies and PLAYSTUDIOS A DL 0001 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .