Correlation Between Fluent and Lendway

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

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

Diversification Opportunities for Fluent and Lendway

-0.42

Correlation Coefficient

Fluent  Lendway

Very good diversification

The 3 months correlation between Fluent and Lendway is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Lendway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendway 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 Lendway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendway has no effect on the direction of Fluent i.e., Fluent and Lendway go up and down completely randomly.

Pair Corralation between Fluent and Lendway

Given the investment horizon of 90 days Fluent Inc is expected to generate 0.79 times more return on investment than Lendway. However, Fluent Inc is 1.27 times less risky than Lendway. It trades about 0.02 of its potential returns per unit of risk. Lendway is currently generating about -0.03 per unit of risk. If you would invest  266.00  in Fluent Inc on December 2, 2024 and sell it today you would earn a total of  5.00  from holding Fluent Inc or generate 1.88% return on investment over 90 days.

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

Fluent Inc  vs.  Lendway

Fluent Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Lendway

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lendway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Fluent and Lendway

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

The idea behind Fluent Inc and Lendway 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.