Correlation Between Flow Capital and CaliberCos
Can any of the company-specific risk be diversified away by investing in both Flow Capital and CaliberCos 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 Capital and CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Capital Corp and CaliberCos Class A, you can compare the effects of market volatilities on Flow Capital and CaliberCos 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 Capital with a short position of CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Capital and CaliberCos.
Diversification Opportunities for Flow Capital and CaliberCos
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flow and CaliberCos is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A and Flow Capital 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 Capital Corp are associated (or correlated) with CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Flow Capital i.e., Flow Capital and CaliberCos go up and down completely randomly.
Pair Corralation between Flow Capital and CaliberCos
Assuming the 90 days horizon Flow Capital Corp is expected to generate 0.58 times more return on investment than CaliberCos. However, Flow Capital Corp is 1.73 times less risky than CaliberCos. It trades about -0.22 of its potential returns per unit of risk. CaliberCos Class A is currently generating about -0.19 per unit of risk. If you would invest 60.00 in Flow Capital Corp on November 7, 2024 and sell it today you would lose (8.00) from holding Flow Capital Corp or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Capital Corp vs. CaliberCos Class A
Performance |
| Timeline |
| Flow Capital Corp |
| CaliberCos Class A |
Flow Capital and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Capital and CaliberCos
The main advantage of trading using opposite Flow Capital and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Capital position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' long position.| Flow Capital vs. Guardian Capital Group | Flow Capital vs. Urbana | Flow Capital vs. Princeton Capital | Flow Capital vs. Blackhawk Growth Corp |
| CaliberCos vs. Cadence Design Systems | CaliberCos vs. Zhihu Inc ADR | CaliberCos vs. Discover Financial Services | CaliberCos vs. National Storage REIT |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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