Correlation Between Aristocrat Leisure and Focus Home
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure 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 Aristocrat Leisure and Focus Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and Focus Home Interactive, you can compare the effects of market volatilities on Aristocrat Leisure 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 Aristocrat Leisure with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Focus Home.
Diversification Opportunities for Aristocrat Leisure and Focus Home
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aristocrat and Focus is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited 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 Aristocrat Leisure 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 Aristocrat Leisure Limited 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 Aristocrat Leisure i.e., Aristocrat Leisure and Focus Home go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Focus Home
Assuming the 90 days horizon Aristocrat Leisure Limited is expected to generate 0.56 times more return on investment than Focus Home. However, Aristocrat Leisure Limited is 1.78 times less risky than Focus Home. It trades about -0.15 of its potential returns per unit of risk. Focus Home Interactive is currently generating about -0.1 per unit of risk. If you would invest 3,827 in Aristocrat Leisure Limited on September 4, 2025 and sell it today you would lose (567.00) from holding Aristocrat Leisure Limited or give up 14.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. Focus Home Interactive
Performance |
| Timeline |
| Aristocrat Leisure |
| Focus Home Interactive |
Aristocrat Leisure and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Focus Home
The main advantage of trading using opposite Aristocrat Leisure and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure 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.| Aristocrat Leisure vs. CHINA EDUCATION GROUP | Aristocrat Leisure vs. G8 EDUCATION | Aristocrat Leisure vs. American Public Education | Aristocrat Leisure vs. SALESFORCE INC CDR |
| Focus Home vs. United Insurance Holdings | Focus Home vs. GREENX METALS LTD | Focus Home vs. CarsalesCom | Focus Home vs. MAGNUM MINING EXP |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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