Correlation Between Flint Telecom and FiscalNote Holdings

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

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

Diversification Opportunities for Flint Telecom and FiscalNote Holdings

0.74

Correlation Coefficient

Flint Telecom  FiscalNote Holdings

Poor diversification

The 3 months correlation between Flint and FiscalNote is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Flint Telecom Group and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and Flint Telecom 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 Flint Telecom Group are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of Flint Telecom i.e., Flint Telecom and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between Flint Telecom and FiscalNote Holdings

Given the investment horizon of 90 days Flint Telecom Group is expected to generate 1.17 times more return on investment than FiscalNote Holdings. However, Flint Telecom is 1.17 times more volatile than FiscalNote Holdings. It trades about 0.15 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about 0.13 per unit of risk. If you would invest  100.00  in Flint Telecom Group on September 23, 2024 and sell it today you would earn a total of  27.00  from holding Flint Telecom Group or generate 27.0% return on investment over 90 days.

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

Flint Telecom Group  vs.  FiscalNote Holdings

Flint Telecom Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flint Telecom Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Flint Telecom reported solid returns over the last few months and may actually be approaching a breakup point.

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FiscalNote Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Flint Telecom and FiscalNote Holdings

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

The idea behind Flint Telecom Group and FiscalNote Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.