Correlation Between Flow Traders and Reliance Industries
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Reliance Industries 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 Flow Traders and Reliance Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Reliance Industries Ltd, you can compare the effects of market volatilities on Flow Traders and Reliance Industries 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 Flow Traders with a short position of Reliance Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Reliance Industries.
Diversification Opportunities for Flow Traders and Reliance Industries
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flow and Reliance is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Reliance Industries Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Industries and Flow Traders 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 Flow Traders NV are associated (or correlated) with Reliance Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Industries has no effect on the direction of Flow Traders i.e., Flow Traders and Reliance Industries go up and down completely randomly.
Pair Corralation between Flow Traders and Reliance Industries
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 1.04 times more return on investment than Reliance Industries. However, Flow Traders is 1.04 times more volatile than Reliance Industries Ltd. It trades about 0.22 of its potential returns per unit of risk. Reliance Industries Ltd is currently generating about -0.12 per unit of risk. If you would invest 1,719 in Flow Traders NV on October 20, 2024 and sell it today you would earn a total of 666.00 from holding Flow Traders NV or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.05% |
| Values | Daily Returns |
Flow Traders NV vs. Reliance Industries Ltd
Performance |
| Timeline |
| Flow Traders NV |
| Reliance Industries |
Flow Traders and Reliance Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Reliance Industries
The main advantage of trading using opposite Flow Traders and Reliance Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Reliance Industries 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 Reliance Industries will offset losses from the drop in Reliance Industries' long position.| Flow Traders vs. Monks Investment Trust | Flow Traders vs. Livermore Investments Group | Flow Traders vs. EJF Investments | Flow Traders vs. United Internet AG |
| Reliance Industries vs. PPHE Hotel Group | Reliance Industries vs. UNIQA Insurance Group | Reliance Industries vs. Wyndham Hotels Resorts | Reliance Industries vs. Applied Materials |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |