Correlation Between Cunningham Natural and Fluent
Can any of the company-specific risk be diversified away by investing in both Cunningham Natural 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 Cunningham Natural and Fluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cunningham Natural Resources and Fluent Inc, you can compare the effects of market volatilities on Cunningham Natural 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 Cunningham Natural with a short position of Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cunningham Natural and Fluent.
Diversification Opportunities for Cunningham Natural and Fluent
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cunningham and Fluent is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cunningham Natural Resources and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and Cunningham Natural 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 Cunningham Natural Resources 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 Cunningham Natural i.e., Cunningham Natural and Fluent go up and down completely randomly.
Pair Corralation between Cunningham Natural and Fluent
Given the investment horizon of 90 days Cunningham Natural Resources is expected to generate 4.46 times more return on investment than Fluent. However, Cunningham Natural is 4.46 times more volatile than Fluent Inc. It trades about 0.08 of its potential returns per unit of risk. Fluent Inc is currently generating about -0.06 per unit of risk. If you would invest 2.04 in Cunningham Natural Resources on September 2, 2024 and sell it today you would lose (0.04) from holding Cunningham Natural Resources or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.43% |
| Values | Daily Returns |
Cunningham Natural Resources vs. Fluent Inc
Performance |
| Timeline |
| Cunningham Natural |
| Fluent Inc |
Cunningham Natural and Fluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cunningham Natural and Fluent
The main advantage of trading using opposite Cunningham Natural and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cunningham Natural 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.| Cunningham Natural vs. Fluent Inc | Cunningham Natural vs. Franklin Street Properties | Cunningham Natural vs. Live Ventures | Cunningham Natural vs. Mid Atlantic Home Health |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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