Correlation Between Fluent and Entravision Communications

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

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

Diversification Opportunities for Fluent and Entravision Communications

0.38

Correlation Coefficient

Fluent  Entravision Communications

Weak diversification

The 3 months correlation between Fluent and Entravision is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Entravision Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entravision Communications 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 Entravision Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entravision Communications has no effect on the direction of Fluent i.e., Fluent and Entravision Communications go up and down completely randomly.

Pair Corralation between Fluent and Entravision Communications

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Entravision Communications. But the stock apears to be less risky and, when comparing its historical volatility, Fluent Inc is 1.33 times less risky than Entravision Communications. The stock trades about -0.1 of its potential returns per unit of risk. The Entravision Communications is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  232.00  in Entravision Communications on December 24, 2024 and sell it today you would lose (16.00) from holding Entravision Communications or give up 6.9% of portfolio value over 90 days.

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

Fluent Inc  vs.  Entravision Communications

Fluent Inc

Risk-Adjusted Performance

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 weak 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.

Entravision Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entravision Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Entravision Communications is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fluent and Entravision Communications

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

The idea behind Fluent Inc and Entravision Communications 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.