Correlation Between Cebu Air and Fluent
Can any of the company-specific risk be diversified away by investing in both Cebu Air 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 Cebu Air and Fluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and Fluent Inc, you can compare the effects of market volatilities on Cebu Air 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 Cebu Air with a short position of Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Fluent.
Diversification Opportunities for Cebu Air and Fluent
Average diversification
The 3 months correlation between Cebu and Fluent is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and Cebu Air 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 Cebu Air ADR 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 Cebu Air i.e., Cebu Air and Fluent go up and down completely randomly.
Pair Corralation between Cebu Air and Fluent
Assuming the 90 days horizon Cebu Air ADR is expected to under-perform the Fluent. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cebu Air ADR is 1.24 times less risky than Fluent. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Fluent Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 399.00 in Fluent Inc on September 2, 2024 and sell it today you would lose (123.00) from holding Fluent Inc or give up 30.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Cebu Air ADR vs. Fluent Inc
Performance |
| Timeline |
| Cebu Air ADR |
| Fluent Inc |
Cebu Air and Fluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Fluent
The main advantage of trading using opposite Cebu Air and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air 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.| Cebu Air vs. Fidus Investment Corp | Cebu Air vs. 51Talk Online Education | Cebu Air vs. Nexstar Broadcasting Group | Cebu Air vs. Evolution Gaming 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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