Correlation Between Fluent and Custom Truck

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

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

Diversification Opportunities for Fluent and Custom Truck

-0.57

Correlation Coefficient

Fluent  Custom Truck

Excellent diversification

The 3 months correlation between Fluent and Custom is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and Fluent 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 Fluent Inc are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Fluent i.e., Fluent and Custom Truck go up and down completely randomly.

Pair Corralation between Fluent and Custom Truck

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Custom Truck. In addition to that, Fluent is 1.6 times more volatile than Custom Truck One. It trades about -0.02 of its total potential returns per unit of risk. Custom Truck One is currently generating about -0.01 per unit of volatility. If you would invest  659.00  in Custom Truck One on October 10, 2024 and sell it today you would lose (198.00) from holding Custom Truck One or give up 30.05% of portfolio value over 90 days.

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

Fluent Inc  vs.  Custom Truck One

Fluent Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Custom Truck One

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fluent and Custom Truck

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

The idea behind Fluent Inc and Custom Truck One 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.