Correlation Between Six Circles and FLIY

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

By analyzing existing cross correlation between Six Circles Unconstrained and FLIY, you can compare the effects of market volatilities on Six Circles and FLIY 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 Six Circles with a short position of FLIY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Circles and FLIY.

Diversification Opportunities for Six Circles and FLIY

-0.54

Correlation Coefficient

Six Circles  FLIY

Excellent diversification

The 3 months correlation between Six and FLIY is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Six Circles Unconstrained and FLIY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLIY and Six Circles 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 Six Circles Unconstrained are associated (or correlated) with FLIY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLIY has no effect on the direction of Six Circles i.e., Six Circles and FLIY go up and down completely randomly.

Pair Corralation between Six Circles and FLIY

If you would invest  2,746  in FLIY on October 9, 2024 and sell it today you would earn a total of  0.00  from holding FLIY or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Six Circles Unconstrained  vs.  FLIY

Six Circles Unconstrained

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Six Circles Unconstrained has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Six Circles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FLIY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FLIY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, FLIY is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Six Circles and FLIY

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

The idea behind Six Circles Unconstrained and FLIY 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.