Correlation Between Flex and MicroCloud Hologram

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

By analyzing existing cross correlation between Flex and MicroCloud Hologram, you can compare the effects of market volatilities on Flex and MicroCloud Hologram 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 MicroCloud Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and MicroCloud Hologram.

Diversification Opportunities for Flex and MicroCloud Hologram

-0.17

Correlation Coefficient

Flex  MicroCloud Hologram

Good diversification

The 3 months correlation between Flex and MicroCloud is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Flex and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram 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 MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of Flex i.e., Flex and MicroCloud Hologram go up and down completely randomly.

Pair Corralation between Flex and MicroCloud Hologram

Given the investment horizon of 90 days Flex is expected to under-perform the MicroCloud Hologram. But the stock apears to be less risky and, when comparing its historical volatility, Flex is 10.08 times less risky than MicroCloud Hologram. The stock trades about -0.01 of its potential returns per unit of risk. The MicroCloud Hologram is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  192.00  in MicroCloud Hologram on December 1, 2024 and sell it today you would lose (95.00) from holding MicroCloud Hologram or give up 49.48% of portfolio value over 90 days.

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

Flex  vs.  MicroCloud Hologram

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.

MicroCloud Hologram

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MicroCloud Hologram are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, MicroCloud Hologram displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flex and MicroCloud Hologram

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

The idea behind Flex and MicroCloud Hologram 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.