Correlation Between Flexible Solutions and Shimmick Common

Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Shimmick Common 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 Shimmick Common 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 Shimmick Common, you can compare the effects of market volatilities on Flexible Solutions and Shimmick Common 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 Shimmick Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Shimmick Common.

Diversification Opportunities for Flexible Solutions and Shimmick Common

-0.48

Correlation Coefficient

Flexible Solutions  Shimmick Common

Very good diversification

The 3 months correlation between Flexible and Shimmick is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common 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 Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Shimmick Common go up and down completely randomly.

Pair Corralation between Flexible Solutions and Shimmick Common

Considering the 90-day investment horizon Flexible Solutions International is expected to generate 0.4 times more return on investment than Shimmick Common. However, Flexible Solutions International is 2.5 times less risky than Shimmick Common. It trades about 0.03 of its potential returns per unit of risk. Shimmick Common is currently generating about 0.0 per unit of risk. If you would invest  300.00  in Flexible Solutions International on October 12, 2024 and sell it today you would earn a total of  80.00  from holding Flexible Solutions International or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	58.59%
Values	Daily Returns

Flexible Solutions Internation  vs.  Shimmick Common

Flexible Solutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Solutions International are ranked lower than 2 (%) 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.

Shimmick Common

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shimmick Common are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent forward indicators, Shimmick Common displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flexible Solutions and Shimmick Common

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

The idea behind Flexible Solutions International and Shimmick Common 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.