Correlation Between Flex and DIAMONDBACK
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By analyzing existing cross correlation between Flex and DIAMONDBACK ENERGY INC, you can compare the effects of market volatilities on Flex and DIAMONDBACK 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 DIAMONDBACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and DIAMONDBACK.
Diversification Opportunities for Flex and DIAMONDBACK
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flex and DIAMONDBACK is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Flex and DIAMONDBACK ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAMONDBACK ENERGY INC 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 DIAMONDBACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAMONDBACK ENERGY INC has no effect on the direction of Flex i.e., Flex and DIAMONDBACK go up and down completely randomly.
Pair Corralation between Flex and DIAMONDBACK
Given the investment horizon of 90 days Flex is expected to generate 3.29 times more return on investment than DIAMONDBACK. However, Flex is 3.29 times more volatile than DIAMONDBACK ENERGY INC. It trades about 0.15 of its potential returns per unit of risk. DIAMONDBACK ENERGY INC is currently generating about -0.22 per unit of risk. If you would invest 3,578 in Flex on August 31, 2024 and sell it today you would earn a total of 304.00 from holding Flex or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Flex vs. DIAMONDBACK ENERGY INC
Performance |
| Timeline |
| Flex |
| DIAMONDBACK ENERGY INC |
Flex and DIAMONDBACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and DIAMONDBACK
The main advantage of trading using opposite Flex and DIAMONDBACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, DIAMONDBACK 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 DIAMONDBACK will offset losses from the drop in DIAMONDBACK's long position.The idea behind Flex and DIAMONDBACK ENERGY INC 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.| DIAMONDBACK vs. RCI Hospitality Holdings | DIAMONDBACK vs. Amkor Technology | DIAMONDBACK vs. Flex | DIAMONDBACK vs. Dominos Pizza |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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