Correlation Between Stagwell and Fluent

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

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

Diversification Opportunities for Stagwell and Fluent

-0.18

Correlation Coefficient

Stagwell  Fluent

Good diversification

The 3 months correlation between Stagwell and Fluent is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and Stagwell 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 Stagwell are associated (or correlated) with Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of Stagwell i.e., Stagwell and Fluent go up and down completely randomly.

Pair Corralation between Stagwell and Fluent

Given the investment horizon of 90 days Stagwell is expected to under-perform the Fluent. But the stock apears to be less risky and, when comparing its historical volatility, Stagwell is 2.15 times less risky than Fluent. The stock trades about -0.75 of its potential returns per unit of risk. The Fluent Inc is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  279.00  in Fluent Inc on October 13, 2024 and sell it today you would lose (16.00) from holding Fluent Inc or give up 5.73% of portfolio value over 90 days.

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

Stagwell  vs.  Fluent Inc

Stagwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Fluent Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stagwell and Fluent

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

The idea behind Stagwell and Fluent 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.