Correlation Between Rumble and Phunware

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

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

Diversification Opportunities for Rumble and Phunware

0.56

Correlation Coefficient

Rumble  Phunware

Very weak diversification

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

Pair Corralation between Rumble and Phunware

Assuming the 90 days horizon Rumble Inc is expected to generate 2.58 times more return on investment than Phunware. However, Rumble is 2.58 times more volatile than Phunware. It trades about 0.07 of its potential returns per unit of risk. Phunware is currently generating about -0.05 per unit of risk. If you would invest  241.00  in Rumble Inc on December 20, 2024 and sell it today you would earn a total of  29.00  from holding Rumble Inc or generate 12.03% return on investment over 90 days.

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

Rumble Inc  vs.  Phunware

Rumble Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, Rumble showed solid returns over the last few months and may actually be approaching a breakup point.

Phunware

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phunware 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 Rumble and Phunware

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

The idea behind Rumble Inc and Phunware 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.