Correlation Between Fluent and ZhongAn Online

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

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

Diversification Opportunities for Fluent and ZhongAn Online

0.05

Correlation Coefficient

Fluent  ZhongAn Online

Significant diversification

The 3 months correlation between Fluent and ZhongAn is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Fluent i.e., Fluent and ZhongAn Online go up and down completely randomly.

Pair Corralation between Fluent and ZhongAn Online

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the ZhongAn Online. But the stock apears to be less risky and, when comparing its historical volatility, Fluent Inc is 1.26 times less risky than ZhongAn Online. The stock trades about -0.07 of its potential returns per unit of risk. The ZhongAn Online P is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  138.00  in ZhongAn Online P on December 20, 2024 and sell it today you would lose (12.00) from holding ZhongAn Online P or give up 8.7% of portfolio value over 90 days.

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

Fluent Inc  vs.  ZhongAn Online P

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.

ZhongAn Online P

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZhongAn Online P 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fluent and ZhongAn Online

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

The idea behind Fluent Inc and ZhongAn Online P 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.