Correlation Between Custom Truck and FlexShopper
Can any of the company-specific risk be diversified away by investing in both Custom Truck 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 Custom Truck and FlexShopper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Custom Truck One and FlexShopper, you can compare the effects of market volatilities on Custom Truck 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 Custom Truck with a short position of FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Custom Truck and FlexShopper.
Diversification Opportunities for Custom Truck and FlexShopper
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Custom and FlexShopper is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper and Custom Truck 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 Custom Truck One 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 Custom Truck i.e., Custom Truck and FlexShopper go up and down completely randomly.
Pair Corralation between Custom Truck and FlexShopper
Given the investment horizon of 90 days Custom Truck is expected to generate 2.02 times less return on investment than FlexShopper. But when comparing it to its historical volatility, Custom Truck One is 1.26 times less risky than FlexShopper. It trades about 0.02 of its potential returns per unit of risk. FlexShopper is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 172.00 in FlexShopper on August 31, 2024 and sell it today you would earn a total of 13.00 from holding FlexShopper or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Custom Truck One vs. FlexShopper
Performance |
| Timeline |
| Custom Truck One |
| FlexShopper |
Custom Truck and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Custom Truck and FlexShopper
The main advantage of trading using opposite Custom Truck and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck 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.| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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