Correlation Between Fluent and 26885BAE0

Can any of the company-specific risk be diversified away by investing in both Fluent and 26885BAE0 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 26885BAE0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fluent Inc and EQM Midstream Partners, you can compare the effects of market volatilities on Fluent and 26885BAE0 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 26885BAE0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and 26885BAE0.

Diversification Opportunities for Fluent and 26885BAE0

0.06

Correlation Coefficient

Fluent  26885BAE0

Significant diversification

The 3 months correlation between Fluent and 26885BAE0 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and EQM Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQM Midstream Partners 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 26885BAE0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQM Midstream Partners has no effect on the direction of Fluent i.e., Fluent and 26885BAE0 go up and down completely randomly.

Pair Corralation between Fluent and 26885BAE0

Given the investment horizon of 90 days Fluent Inc is expected to generate 1.31 times more return on investment than 26885BAE0. However, Fluent is 1.31 times more volatile than EQM Midstream Partners. It trades about 0.01 of its potential returns per unit of risk. EQM Midstream Partners is currently generating about -0.12 per unit of risk. If you would invest  275.00  in Fluent Inc on September 5, 2024 and sell it today you would lose (8.00) from holding Fluent Inc or give up 2.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Fluent Inc  vs.  EQM Midstream Partners

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 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.

EQM Midstream Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EQM Midstream Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for EQM Midstream Partners investors.

Pair Trading with Fluent and 26885BAE0

The main advantage of trading using opposite Fluent and 26885BAE0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, 26885BAE0 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 26885BAE0 will offset losses from the drop in 26885BAE0's long position.

The idea behind Fluent Inc and EQM Midstream Partners 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .