Correlation Between Unusual Whales and FLEX LNG

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

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

Diversification Opportunities for Unusual Whales and FLEX LNG

-0.56

Correlation Coefficient

Unusual Whales  FLEX LNG

Excellent diversification

The 3 months correlation between Unusual and FLEX is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Unusual Whales Subversive and FLEX LNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLEX LNG and Unusual Whales 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 Unusual Whales Subversive are associated (or correlated) with FLEX LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLEX LNG has no effect on the direction of Unusual Whales i.e., Unusual Whales and FLEX LNG go up and down completely randomly.

Pair Corralation between Unusual Whales and FLEX LNG

Given the investment horizon of 90 days Unusual Whales Subversive is expected to generate 0.45 times more return on investment than FLEX LNG. However, Unusual Whales Subversive is 2.23 times less risky than FLEX LNG. It trades about 0.06 of its potential returns per unit of risk. FLEX LNG is currently generating about -0.1 per unit of risk. If you would invest  3,826  in Unusual Whales Subversive on September 30, 2024 and sell it today you would earn a total of  92.00  from holding Unusual Whales Subversive or generate 2.4% return on investment over 90 days.

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

Unusual Whales Subversive  vs.  FLEX LNG

Unusual Whales Subversive

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Unusual Whales Subversive are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Unusual Whales is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

FLEX LNG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FLEX LNG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Unusual Whales and FLEX LNG

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

The idea behind Unusual Whales Subversive and FLEX LNG 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.