Correlation Between Fluent and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both Fluent and Arm Holdings 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 Fluent and Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Arm Holdings plc, you can compare the effects of market volatilities on Fluent and Arm Holdings 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 Fluent with a short position of Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Arm Holdings.
Diversification Opportunities for Fluent and Arm Holdings
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fluent and Arm is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc and Fluent 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 Fluent Inc are associated (or correlated) with Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Fluent i.e., Fluent and Arm Holdings go up and down completely randomly.
Pair Corralation between Fluent and Arm Holdings
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Arm Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Fluent Inc is 1.03 times less risky than Arm Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Arm Holdings plc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 14,104 in Arm Holdings plc on October 24, 2024 and sell it today you would earn a total of 3,889 from holding Arm Holdings plc or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. Arm Holdings plc
Performance |
| Timeline |
| Fluent Inc |
| Arm Holdings plc |
Fluent and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Arm Holdings
The main advantage of trading using opposite Fluent and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Arm Holdings 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
| Arm Holdings vs. Mesa Air Group | Arm Holdings vs. Pekin Life Insurance | Arm Holdings vs. Norfolk Southern | Arm Holdings vs. Palomar Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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