Correlation Between Fluent and Sun Pacific

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

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

Diversification Opportunities for Fluent and Sun Pacific

0.81

Correlation Coefficient

Fluent  Sun Pacific

Very poor diversification

The 3 months correlation between Fluent and Sun is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Sun Pacific Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Pacific Holding 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 Sun Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Pacific Holding has no effect on the direction of Fluent i.e., Fluent and Sun Pacific go up and down completely randomly.

Pair Corralation between Fluent and Sun Pacific

Given the investment horizon of 90 days Fluent Inc is expected to generate 0.74 times more return on investment than Sun Pacific. However, Fluent Inc is 1.35 times less risky than Sun Pacific. It trades about -0.06 of its potential returns per unit of risk. Sun Pacific Holding is currently generating about -0.19 per unit of risk. If you would invest  266.00  in Fluent Inc on December 27, 2024 and sell it today you would lose (43.00) from holding Fluent Inc or give up 16.17% of portfolio value over 90 days.

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

Fluent Inc  vs.  Sun Pacific Holding

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.

Sun Pacific Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Pacific Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Fluent and Sun Pacific

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

The idea behind Fluent Inc and Sun Pacific Holding 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.