Correlation Between Fortress Transp and Rumble

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

By analyzing existing cross correlation between Fortress Transp Infra and Rumble Inc, you can compare the effects of market volatilities on Fortress Transp and Rumble 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 Fortress Transp with a short position of Rumble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Rumble.

Diversification Opportunities for Fortress Transp and Rumble

0.19

Correlation Coefficient

Fortress Transp  Rumble

Average diversification

The 3 months correlation between Fortress and Rumble is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc and Fortress Transp 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 Fortress Transp Infra are associated (or correlated) with Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of Fortress Transp i.e., Fortress Transp and Rumble go up and down completely randomly.

Pair Corralation between Fortress Transp and Rumble

Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 1.5 times more return on investment than Rumble. However, Fortress Transp is 1.5 times more volatile than Rumble Inc. It trades about 0.01 of its potential returns per unit of risk. Rumble Inc is currently generating about -0.2 per unit of risk. If you would invest  12,613  in Fortress Transp Infra on December 29, 2024 and sell it today you would lose (1,377) from holding Fortress Transp Infra or give up 10.92% of portfolio value over 90 days.

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

Fortress Transp Infra  vs.  Rumble Inc

Fortress Transp Infra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortress Transp Infra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Fortress Transp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Rumble Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rumble Inc 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Fortress Transp and Rumble

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

The idea behind Fortress Transp Infra and Rumble Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.