Correlation Between Fuse Science and EverCommerce

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

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

Diversification Opportunities for Fuse Science and EverCommerce

0.7

Correlation Coefficient

Fuse Science  EverCommerce

Poor diversification

The 3 months correlation between Fuse and EverCommerce is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fuse Science and EverCommerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverCommerce and Fuse Science 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 Fuse Science are associated (or correlated) with EverCommerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverCommerce has no effect on the direction of Fuse Science i.e., Fuse Science and EverCommerce go up and down completely randomly.

Pair Corralation between Fuse Science and EverCommerce

Given the investment horizon of 90 days Fuse Science is expected to under-perform the EverCommerce. In addition to that, Fuse Science is 5.38 times more volatile than EverCommerce. It trades about -0.04 of its total potential returns per unit of risk. EverCommerce is currently generating about -0.03 per unit of volatility. If you would invest  1,102  in EverCommerce on December 29, 2024 and sell it today you would lose (56.00) from holding EverCommerce or give up 5.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Fuse Science  vs.  EverCommerce

Fuse Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fuse Science has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

EverCommerce

Risk-Adjusted Performance

Very Weak

Over the last 90 days EverCommerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, EverCommerce is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fuse Science and EverCommerce

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

The idea behind Fuse Science and EverCommerce 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.