Correlation Between Focus Financial and A-Mark Precious

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Can any of the company-specific risk be diversified away by investing in both Focus Financial and A-Mark Precious 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 Focus Financial and A-Mark Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Financial Partners and A-Mark Precious Meta, you can compare the effects of market volatilities on Focus Financial and A-Mark Precious 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 Focus Financial with a short position of A-Mark Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Financial and A-Mark Precious.

Diversification Opportunities for Focus Financial and A-Mark Precious

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Focus and A-Mark is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Focus Financial Partners and A-Mark Precious Meta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A-Mark Precious Meta and Focus Financial 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 Focus Financial Partners are associated (or correlated) with A-Mark Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A-Mark Precious Meta has no effect on the direction of Focus Financial i.e., Focus Financial and A-Mark Precious go up and down completely randomly.

Pair Corralation between Focus Financial and A-Mark Precious

Given the investment horizon of 90 days Focus Financial Partners is expected to under-perform the A-Mark Precious. But the stock apears to be less risky and, when comparing its historical volatility, Focus Financial Partners is 1.57 times less risky than A-Mark Precious. The stock trades about 0.0 of its potential returns per unit of risk. The A-Mark Precious Meta is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,679  in A-Mark Precious Meta on July 6, 2022 and sell it today you would earn a total of  1,243  from holding A-Mark Precious Meta or generate 74.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Focus Financial Partners  vs.  A-Mark Precious Meta

 Performance (%) 
       Timeline  
Focus Financial Partners 
Focus Performance
0 of 100
Over the last 90 days Focus Financial Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Focus Price Channel

A-Mark Precious Meta 
A-Mark Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in A-Mark Precious Meta are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, A-Mark Precious may actually be approaching a critical reversion point that can send shares even higher in November 2022.

A-Mark Price Channel

Focus Financial and A-Mark Precious Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Focus Financial and A-Mark Precious

The main advantage of trading using opposite Focus Financial and A-Mark Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Financial position performs unexpectedly, A-Mark Precious 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 A-Mark Precious will offset losses from the drop in A-Mark Precious' long position.
Focus Financial vs. Boeing Company
The idea behind Focus Financial Partners and A-Mark Precious Meta 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.
A-Mark Precious vs. Amazon Inc
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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