Correlation Between Black Diamond and FlexShopper
Can any of the company-specific risk be diversified away by investing in both Black Diamond and FlexShopper 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 Black Diamond and FlexShopper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Diamond Group and FlexShopper, you can compare the effects of market volatilities on Black Diamond and FlexShopper 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 Black Diamond with a short position of FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Diamond and FlexShopper.
Diversification Opportunities for Black Diamond and FlexShopper
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and FlexShopper is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Black Diamond Group and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper and Black Diamond 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 Black Diamond Group are associated (or correlated) with FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of Black Diamond i.e., Black Diamond and FlexShopper go up and down completely randomly.
Pair Corralation between Black Diamond and FlexShopper
Assuming the 90 days horizon Black Diamond is expected to generate 1.22 times less return on investment than FlexShopper. But when comparing it to its historical volatility, Black Diamond Group is 2.43 times less risky than FlexShopper. It trades about 0.08 of its potential returns per unit of risk. FlexShopper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 115.00 in FlexShopper on October 21, 2024 and sell it today you would earn a total of 51.00 from holding FlexShopper or generate 44.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.6% |
| Values | Daily Returns |
Black Diamond Group vs. FlexShopper
Performance |
| Timeline |
| Black Diamond Group |
| FlexShopper |
Black Diamond and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Diamond and FlexShopper
The main advantage of trading using opposite Black Diamond and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Diamond position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper's long position.| Black Diamond vs. BOC Aviation Limited | Black Diamond vs. Alta Equipment Group | Black Diamond vs. Ashtead Group plc | Black Diamond vs. African Discovery Group |
| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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