Correlation Between American Battery and Fluent

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

By analyzing existing cross correlation between American Battery Technology and Fluent Inc, you can compare the effects of market volatilities on American Battery and Fluent 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 American Battery with a short position of Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Battery and Fluent.

Diversification Opportunities for American Battery and Fluent

-0.26

Correlation Coefficient

American Battery  Fluent

Very good diversification

The 3 months correlation between American and Fluent is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding American Battery Technology and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and American Battery 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 American Battery Technology are associated (or correlated) with Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of American Battery i.e., American Battery and Fluent go up and down completely randomly.

Pair Corralation between American Battery and Fluent

Given the investment horizon of 90 days American Battery Technology is expected to under-perform the Fluent. In addition to that, American Battery is 1.0 times more volatile than Fluent Inc. It trades about -0.02 of its total potential returns per unit of risk. Fluent Inc is currently generating about 0.02 per unit of volatility. If you would invest  275.00  in Fluent Inc on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Fluent Inc or generate 0.36% return on investment over 90 days.

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

American Battery Technology  vs.  Fluent Inc

American Battery Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Battery Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, American Battery is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fluent Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fluent may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with American Battery and Fluent

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

The idea behind American Battery Technology and Fluent Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.