Correlation Between Fuse Science and I3 Verticals

Can any of the company-specific risk be diversified away by investing in both Fuse Science and I3 Verticals 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 I3 Verticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fuse Science and i3 Verticals, you can compare the effects of market volatilities on Fuse Science and I3 Verticals 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 I3 Verticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuse Science and I3 Verticals.

Diversification Opportunities for Fuse Science and I3 Verticals

-0.47

Correlation Coefficient

Fuse Science  I3 Verticals

Very good diversification

The 3 months correlation between Fuse and IIIV is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fuse Science and i3 Verticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i3 Verticals 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 I3 Verticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i3 Verticals has no effect on the direction of Fuse Science i.e., Fuse Science and I3 Verticals go up and down completely randomly.

Pair Corralation between Fuse Science and I3 Verticals

Given the investment horizon of 90 days Fuse Science is expected to under-perform the I3 Verticals. In addition to that, Fuse Science is 4.82 times more volatile than i3 Verticals. It trades about -0.02 of its total potential returns per unit of risk. i3 Verticals is currently generating about 0.01 per unit of volatility. If you would invest  2,455  in i3 Verticals on December 4, 2024 and sell it today you would lose (10.00) from holding i3 Verticals or give up 0.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Fuse Science  vs.  i3 Verticals

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.

i3 Verticals

Risk-Adjusted Performance

Weak

Over the last 90 days i3 Verticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, I3 Verticals is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fuse Science and I3 Verticals

The main advantage of trading using opposite Fuse Science and I3 Verticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuse Science position performs unexpectedly, I3 Verticals 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 I3 Verticals will offset losses from the drop in I3 Verticals' long position.

The idea behind Fuse Science and i3 Verticals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.