Correlation Between Meridianlink and FlexiInternational

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

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

Diversification Opportunities for Meridianlink and FlexiInternational

-0.2

Correlation Coefficient

Meridianlink  FlexiInternational

Good diversification

The 3 months correlation between Meridianlink and FlexiInternational is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Meridianlink and FlexiInternational Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexiInternational and Meridianlink 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 Meridianlink are associated (or correlated) with FlexiInternational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexiInternational has no effect on the direction of Meridianlink i.e., Meridianlink and FlexiInternational go up and down completely randomly.

Pair Corralation between Meridianlink and FlexiInternational

Given the investment horizon of 90 days Meridianlink is expected to under-perform the FlexiInternational. In addition to that, Meridianlink is 1.32 times more volatile than FlexiInternational Software. It trades about -0.05 of its total potential returns per unit of risk. FlexiInternational Software is currently generating about 0.21 per unit of volatility. If you would invest  52.00  in FlexiInternational Software on December 26, 2024 and sell it today you would earn a total of  5.00  from holding FlexiInternational Software or generate 9.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.07%
Values	Daily Returns

Meridianlink  vs.  FlexiInternational Software

Meridianlink

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meridianlink has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

FlexiInternational

Risk-Adjusted Performance

Solid

Over the last 90 days FlexiInternational Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly abnormal basic indicators, FlexiInternational demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meridianlink and FlexiInternational

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

The idea behind Meridianlink and FlexiInternational Software 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.