Correlation Between ZhongAn Online and Fluent

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

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

Diversification Opportunities for ZhongAn Online and Fluent

0.35

Correlation Coefficient

ZhongAn Online  Fluent

Weak diversification

The 3 months correlation between ZhongAn and Fluent is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and ZhongAn Online 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 ZhongAn Online P 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 ZhongAn Online i.e., ZhongAn Online and Fluent go up and down completely randomly.

Pair Corralation between ZhongAn Online and Fluent

Assuming the 90 days horizon ZhongAn Online P is expected to under-perform the Fluent. But the pink sheet apears to be less risky and, when comparing its historical volatility, ZhongAn Online P is 1.49 times less risky than Fluent. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Fluent Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  966.00  in Fluent Inc on October 26, 2024 and sell it today you would lose (683.00) from holding Fluent Inc or give up 70.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

ZhongAn Online P  vs.  Fluent Inc

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company 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 ZhongAn Online and Fluent

The main advantage of trading using opposite ZhongAn Online and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online 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 ZhongAn Online P 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..