Correlation Between FLEH and FLFR

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

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

Diversification Opportunities for FLEH and FLFR

0.0

Correlation Coefficient

FLEH  FLFR

Pay attention - limited upside

The 3 months correlation between FLEH and FLFR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FLEH and FLFR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLFR and FLEH 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 FLEH are associated (or correlated) with FLFR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLFR has no effect on the direction of FLEH i.e., FLEH and FLFR go up and down completely randomly.

Pair Corralation between FLEH and FLFR

If you would invest (100.00) in FLFR on December 26, 2024 and sell it today you would earn a total of  100.00  from holding FLFR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FLEH  vs.  FLFR

FLEH

Risk-Adjusted Performance

Very Weak

Over the last 90 days FLEH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, FLEH is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

FLFR

Risk-Adjusted Performance

Very Weak

Over the last 90 days FLFR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, FLFR is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with FLEH and FLFR

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

The idea behind FLEH and FLFR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..