Correlation Between Fluent and Steel Connect
Can any of the company-specific risk be diversified away by investing in both Fluent and Steel Connect 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 Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Steel Connect, you can compare the effects of market volatilities on Fluent and Steel Connect 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 Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Steel Connect.
Diversification Opportunities for Fluent and Steel Connect
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fluent and Steel is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect 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 Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Fluent i.e., Fluent and Steel Connect go up and down completely randomly.
Pair Corralation between Fluent and Steel Connect
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Steel Connect. In addition to that, Fluent is 3.01 times more volatile than Steel Connect. It trades about -0.13 of its total potential returns per unit of risk. Steel Connect is currently generating about 0.04 per unit of volatility. If you would invest 1,210 in Steel Connect on October 9, 2024 and sell it today you would earn a total of 8.00 from holding Steel Connect or generate 0.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 94.74% |
Values | Daily Returns |
Fluent Inc vs. Steel Connect
Performance |
Timeline |
Fluent Inc |
Steel Connect |
Fluent and Steel Connect Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fluent and Steel Connect
The main advantage of trading using opposite Fluent and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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