Correlation Between Flex and 51Talk Online
Can any of the company-specific risk be diversified away by investing in both Flex and 51Talk Online 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 Flex and 51Talk Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and 51Talk Online Education, you can compare the effects of market volatilities on Flex and 51Talk Online 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 Flex with a short position of 51Talk Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and 51Talk Online.
Diversification Opportunities for Flex and 51Talk Online
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flex and 51Talk is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Flex and 51Talk Online Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 51Talk Online Education and Flex 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 Flex are associated (or correlated) with 51Talk Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 51Talk Online Education has no effect on the direction of Flex i.e., Flex and 51Talk Online go up and down completely randomly.
Pair Corralation between Flex and 51Talk Online
Given the investment horizon of 90 days Flex is expected to generate 1.04 times more return on investment than 51Talk Online. However, Flex is 1.04 times more volatile than 51Talk Online Education. It trades about 0.28 of its potential returns per unit of risk. 51Talk Online Education is currently generating about -0.11 per unit of risk. If you would invest 3,525 in Flex on August 27, 2024 and sell it today you would earn a total of 582.00 from holding Flex or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flex vs. 51Talk Online Education
Performance |
| Timeline |
| Flex |
| 51Talk Online Education |
Flex and 51Talk Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and 51Talk Online
The main advantage of trading using opposite Flex and 51Talk Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, 51Talk Online 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 51Talk Online will offset losses from the drop in 51Talk Online's long position.The idea behind Flex and 51Talk Online Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 51Talk Online vs. American Public Education | 51Talk Online vs. Lincoln Educational Services | 51Talk Online vs. Adtalem Global Education |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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