Correlation Between Flex and 26442UAM6

Can any of the company-specific risk be diversified away by investing in both Flex and 26442UAM6 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 26442UAM6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flex and DUK 29 15 AUG 51, you can compare the effects of market volatilities on Flex and 26442UAM6 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 26442UAM6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and 26442UAM6.

Diversification Opportunities for Flex and 26442UAM6

0.16

Correlation Coefficient

Flex  26442UAM6

Average diversification

The 3 months correlation between Flex and 26442UAM6 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Flex and DUK 29 15 AUG 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 29 15 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 26442UAM6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 29 15 has no effect on the direction of Flex i.e., Flex and 26442UAM6 go up and down completely randomly.

Pair Corralation between Flex and 26442UAM6

Given the investment horizon of 90 days Flex is expected to generate 0.3 times more return on investment than 26442UAM6. However, Flex is 3.29 times less risky than 26442UAM6. It trades about 0.29 of its potential returns per unit of risk. DUK 29 15 AUG 51 is currently generating about 0.08 per unit of risk. If you would invest  3,816  in Flex on October 10, 2024 and sell it today you would earn a total of  302.00  from holding Flex or generate 7.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.0%
Values	Daily Returns

Flex  vs.  DUK 29 15 AUG 51

Flex

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flex are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Flex showed solid returns over the last few months and may actually be approaching a breakup point.

DUK 29 15

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUK 29 15 AUG 51 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, 26442UAM6 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Flex and 26442UAM6

The main advantage of trading using opposite Flex and 26442UAM6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, 26442UAM6 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 26442UAM6 will offset losses from the drop in 26442UAM6's long position.

The idea behind Flex and DUK 29 15 AUG 51 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.