Correlation Between Fluent and Clear Channel
Can any of the company-specific risk be diversified away by investing in both Fluent and Clear Channel 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 Clear Channel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Clear Channel Outdoor, you can compare the effects of market volatilities on Fluent and Clear Channel 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 Clear Channel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Clear Channel.
Diversification Opportunities for Fluent and Clear Channel
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fluent and Clear is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor 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 Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Fluent i.e., Fluent and Clear Channel go up and down completely randomly.
Pair Corralation between Fluent and Clear Channel
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Clear Channel. In addition to that, Fluent is 1.39 times more volatile than Clear Channel Outdoor. It trades about -0.05 of its total potential returns per unit of risk. Clear Channel Outdoor is currently generating about 0.05 per unit of volatility. If you would invest 147.00 in Clear Channel Outdoor on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Clear Channel Outdoor or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. Clear Channel Outdoor
Performance |
| Timeline |
| Fluent Inc |
| Clear Channel Outdoor |
Fluent and Clear Channel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Clear Channel
The main advantage of trading using opposite Fluent and Clear Channel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Clear Channel 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 Clear Channel will offset losses from the drop in Clear Channel's long position.The idea behind Fluent Inc and Clear Channel Outdoor 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.| Clear Channel vs. Mirriad Advertising plc | Clear Channel vs. INEO Tech Corp | Clear Channel vs. Kidoz Inc | Clear Channel vs. Marchex |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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