Correlation Between Flow Beverage and Apple Rush

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

By analyzing existing cross correlation between Flow Beverage Corp and Apple Rush, you can compare the effects of market volatilities on Flow Beverage and Apple Rush 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 Flow Beverage with a short position of Apple Rush. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Beverage and Apple Rush.

Diversification Opportunities for Flow Beverage and Apple Rush

0.63

Correlation Coefficient

Flow Beverage  Apple Rush

Poor diversification

The 3 months correlation between Flow and Apple is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Flow Beverage Corp and Apple Rush in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Rush and Flow Beverage 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 Flow Beverage Corp are associated (or correlated) with Apple Rush. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Rush has no effect on the direction of Flow Beverage i.e., Flow Beverage and Apple Rush go up and down completely randomly.

Pair Corralation between Flow Beverage and Apple Rush

Assuming the 90 days horizon Flow Beverage Corp is expected to generate 0.71 times more return on investment than Apple Rush. However, Flow Beverage Corp is 1.41 times less risky than Apple Rush. It trades about -0.04 of its potential returns per unit of risk. Apple Rush is currently generating about -0.03 per unit of risk. If you would invest  14.00  in Flow Beverage Corp on September 5, 2024 and sell it today you would lose (4.00) from holding Flow Beverage Corp or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Flow Beverage Corp  vs.  Apple Rush

Flow Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flow Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Apple Rush

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Rush 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Flow Beverage and Apple Rush

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

The idea behind Flow Beverage Corp and Apple Rush 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.