Correlation Between Flexion Mobile and Inwido AB

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

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

Diversification Opportunities for Flexion Mobile and Inwido AB

-0.28

Correlation Coefficient

Flexion Mobile  Inwido AB

Very good diversification

The 3 months correlation between Flexion and Inwido is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Flexion Mobile PLC and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Flexion Mobile 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 Flexion Mobile PLC are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Flexion Mobile i.e., Flexion Mobile and Inwido AB go up and down completely randomly.

Pair Corralation between Flexion Mobile and Inwido AB

Assuming the 90 days trading horizon Flexion Mobile PLC is expected to under-perform the Inwido AB. In addition to that, Flexion Mobile is 1.2 times more volatile than Inwido AB. It trades about -0.09 of its total potential returns per unit of risk. Inwido AB is currently generating about 0.15 per unit of volatility. If you would invest  18,390  in Inwido AB on December 22, 2024 and sell it today you would earn a total of  2,610  from holding Inwido AB or generate 14.19% return on investment over 90 days.

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

Flexion Mobile PLC  vs.  Inwido AB

Flexion Mobile PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flexion Mobile PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Inwido AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inwido AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Inwido AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flexion Mobile and Inwido AB

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

The idea behind Flexion Mobile PLC and Inwido AB 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.