Correlation Between BOS Better and Fluent

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

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

Diversification Opportunities for BOS Better and Fluent

-0.63

Correlation Coefficient

BOS Better  Fluent

Excellent diversification

The 3 months correlation between BOS and Fluent is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and BOS Better 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 BOS Better Online 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 BOS Better i.e., BOS Better and Fluent go up and down completely randomly.

Pair Corralation between BOS Better and Fluent

Given the investment horizon of 90 days BOS Better Online is expected to generate 0.47 times more return on investment than Fluent. However, BOS Better Online is 2.12 times less risky than Fluent. It trades about -0.08 of its potential returns per unit of risk. Fluent Inc is currently generating about -0.06 per unit of risk. If you would invest  338.00  in BOS Better Online on September 27, 2024 and sell it today you would lose (9.00) from holding BOS Better Online or give up 2.66% of portfolio value over 90 days.

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

BOS Better Online  vs.  Fluent Inc

BOS Better Online

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fluent Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BOS Better and Fluent

The main advantage of trading using opposite BOS Better and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better 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 BOS Better Online 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.