Correlation Between Flywire Corp and I3 Verticals

Can any of the company-specific risk be diversified away by investing in both Flywire Corp and I3 Verticals 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 Flywire Corp and I3 Verticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flywire Corp and i3 Verticals, you can compare the effects of market volatilities on Flywire Corp and I3 Verticals 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 Flywire Corp with a short position of I3 Verticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flywire Corp and I3 Verticals.

Diversification Opportunities for Flywire Corp and I3 Verticals

0.26

Correlation Coefficient

Flywire Corp  I3 Verticals

Modest diversification

The 3 months correlation between Flywire and IIIV is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Flywire Corp and i3 Verticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i3 Verticals and Flywire Corp 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 Flywire Corp are associated (or correlated) with I3 Verticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i3 Verticals has no effect on the direction of Flywire Corp i.e., Flywire Corp and I3 Verticals go up and down completely randomly.

Pair Corralation between Flywire Corp and I3 Verticals

Given the investment horizon of 90 days Flywire Corp is expected to under-perform the I3 Verticals. In addition to that, Flywire Corp is 2.53 times more volatile than i3 Verticals. It trades about -0.18 of its total potential returns per unit of risk. i3 Verticals is currently generating about 0.04 per unit of volatility. If you would invest  2,367  in i3 Verticals on December 28, 2024 and sell it today you would earn a total of  92.00  from holding i3 Verticals or generate 3.89% return on investment over 90 days.

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

Flywire Corp  vs.  i3 Verticals

Flywire Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flywire Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

i3 Verticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in i3 Verticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, I3 Verticals is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Flywire Corp and I3 Verticals

The main advantage of trading using opposite Flywire Corp and I3 Verticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flywire Corp position performs unexpectedly, I3 Verticals 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 I3 Verticals will offset losses from the drop in I3 Verticals' long position.

The idea behind Flywire Corp and i3 Verticals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.