Correlation Between Fluent and Ivanhoe Electric

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

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

Diversification Opportunities for Fluent and Ivanhoe Electric

0.67

Correlation Coefficient

Fluent  Ivanhoe Electric

Poor diversification

The 3 months correlation between Fluent and Ivanhoe is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric 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 Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Fluent i.e., Fluent and Ivanhoe Electric go up and down completely randomly.

Pair Corralation between Fluent and Ivanhoe Electric

Given the investment horizon of 90 days Fluent Inc is expected to generate 0.77 times more return on investment than Ivanhoe Electric. However, Fluent Inc is 1.3 times less risky than Ivanhoe Electric. It trades about 0.09 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.08 per unit of risk. If you would invest  268.00  in Fluent Inc on October 24, 2024 and sell it today you would earn a total of  12.00  from holding Fluent Inc or generate 4.48% return on investment over 90 days.

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

Fluent Inc  vs.  Ivanhoe Electric

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 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.

Ivanhoe Electric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Fluent and Ivanhoe Electric

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

The idea behind Fluent Inc and Ivanhoe Electric 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.