Correlation Between Flex and Actelis Networks

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

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

Diversification Opportunities for Flex and Actelis Networks

0.44

Correlation Coefficient

Flex  Actelis Networks

Very weak diversification

The 3 months correlation between Flex and Actelis is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Actelis Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actelis Networks and Flex 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 Flex are associated (or correlated) with Actelis Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actelis Networks has no effect on the direction of Flex i.e., Flex and Actelis Networks go up and down completely randomly.

Pair Corralation between Flex and Actelis Networks

Given the investment horizon of 90 days Flex is expected to generate 3.15 times less return on investment than Actelis Networks. But when comparing it to its historical volatility, Flex is 8.27 times less risky than Actelis Networks. It trades about 0.09 of its potential returns per unit of risk. Actelis Networks is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  356.00  in Actelis Networks on December 1, 2024 and sell it today you would lose (256.00) from holding Actelis Networks or give up 71.91% of portfolio value over 90 days.

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

Flex  vs.  Actelis Networks

Flex

Risk-Adjusted Performance

Very Weak

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

Actelis Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Actelis Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Flex and Actelis Networks

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

The idea behind Flex and Actelis Networks 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.