Correlation Between FlexShopper and Multi Ways

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

By analyzing existing cross correlation between FlexShopper and Multi Ways Holdings, you can compare the effects of market volatilities on FlexShopper and Multi Ways 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 FlexShopper with a short position of Multi Ways. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShopper and Multi Ways.

Diversification Opportunities for FlexShopper and Multi Ways

-0.17

Correlation Coefficient

FlexShopper  Multi Ways

Good diversification

The 3 months correlation between FlexShopper and Multi is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways Holdings and FlexShopper 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 FlexShopper are associated (or correlated) with Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of FlexShopper i.e., FlexShopper and Multi Ways go up and down completely randomly.

Pair Corralation between FlexShopper and Multi Ways

Given the investment horizon of 90 days FlexShopper is expected to under-perform the Multi Ways. In addition to that, FlexShopper is 1.38 times more volatile than Multi Ways Holdings. It trades about -0.02 of its total potential returns per unit of risk. Multi Ways Holdings is currently generating about 0.04 per unit of volatility. If you would invest  31.00  in Multi Ways Holdings on December 30, 2024 and sell it today you would earn a total of  2.00  from holding Multi Ways Holdings or generate 6.45% return on investment over 90 days.

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

FlexShopper  vs.  Multi Ways Holdings

FlexShopper

Risk-Adjusted Performance

Very Weak

Over the last 90 days FlexShopper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Multi Ways Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Ways Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Multi Ways may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with FlexShopper and Multi Ways

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

The idea behind FlexShopper and Multi Ways Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.