Correlation Between Flexion Mobile and Investment
Can any of the company-specific risk be diversified away by investing in both Flexion Mobile and Investment 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 Flexion Mobile and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexion Mobile PLC and Investment AB Oresund, you can compare the effects of market volatilities on Flexion Mobile and Investment 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 Flexion Mobile with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexion Mobile and Investment.
Diversification Opportunities for Flexion Mobile and Investment
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flexion and Investment is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Flexion Mobile PLC and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund and Flexion Mobile 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 Flexion Mobile PLC are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Flexion Mobile i.e., Flexion Mobile and Investment go up and down completely randomly.
Pair Corralation between Flexion Mobile and Investment
Assuming the 90 days trading horizon Flexion Mobile PLC is expected to under-perform the Investment. In addition to that, Flexion Mobile is 1.98 times more volatile than Investment AB Oresund. It trades about -0.08 of its total potential returns per unit of risk. Investment AB Oresund is currently generating about -0.13 per unit of volatility. If you would invest 11,620 in Investment AB Oresund on August 29, 2024 and sell it today you would lose (480.00) from holding Investment AB Oresund or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexion Mobile PLC vs. Investment AB Oresund
Performance |
| Timeline |
| Flexion Mobile PLC |
| Investment AB Oresund |
Flexion Mobile and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexion Mobile and Investment
The main advantage of trading using opposite Flexion Mobile and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexion Mobile position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Flexion Mobile vs. JLT Mobile Computers | Flexion Mobile vs. Invisio Communications AB | Flexion Mobile vs. Swedbank AB | Flexion Mobile vs. Lundin Mining |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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