Correlation Between Flexible Solutions and GameStop Corp

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

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

Diversification Opportunities for Flexible Solutions and GameStop Corp

0.12

Correlation Coefficient

Flexible Solutions  GameStop Corp

Average diversification

The 3 months correlation between Flexible and GameStop is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and GameStop Corp go up and down completely randomly.

Pair Corralation between Flexible Solutions and GameStop Corp

Considering the 90-day investment horizon Flexible Solutions International is expected to generate 1.06 times more return on investment than GameStop Corp. However, Flexible Solutions is 1.06 times more volatile than GameStop Corp. It trades about 0.16 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.07 per unit of risk. If you would invest  184.00  in Flexible Solutions International on October 8, 2024 and sell it today you would earn a total of  188.00  from holding Flexible Solutions International or generate 102.17% return on investment over 90 days.

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

Flexible Solutions Internation  vs.  GameStop Corp

Flexible Solutions

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Solutions International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Flexible Solutions may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GameStop Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flexible Solutions and GameStop Corp

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

The idea behind Flexible Solutions International and GameStop Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.