Correlation Between Fluent and Investcorp India

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

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

Diversification Opportunities for Fluent and Investcorp India

0.21

Correlation Coefficient

Fluent  Investcorp India

Modest diversification

The 3 months correlation between Fluent and Investcorp is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Investcorp India Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp India Acq 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 Investcorp India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp India Acq has no effect on the direction of Fluent i.e., Fluent and Investcorp India go up and down completely randomly.

Pair Corralation between Fluent and Investcorp India

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Investcorp India. In addition to that, Fluent is 11.93 times more volatile than Investcorp India Acquisition. It trades about -0.01 of its total potential returns per unit of risk. Investcorp India Acquisition is currently generating about 0.06 per unit of volatility. If you would invest  1,031  in Investcorp India Acquisition on September 12, 2024 and sell it today you would earn a total of  134.00  from holding Investcorp India Acquisition or generate 13.0% return on investment over 90 days.

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

Fluent Inc  vs.  Investcorp India Acquisition

Fluent Inc

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fluent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Investcorp India Acq

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp India Acquisition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Investcorp India is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fluent and Investcorp India

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

The idea behind Fluent Inc and Investcorp India Acquisition 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.