Correlation Between Fluent and Crown LNG
Can any of the company-specific risk be diversified away by investing in both Fluent and Crown LNG 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 Crown LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Crown LNG Holdings, you can compare the effects of market volatilities on Fluent and Crown LNG 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 Crown LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Crown LNG.
Diversification Opportunities for Fluent and Crown LNG
Average diversification
The 3 months correlation between Fluent and Crown is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Crown LNG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown LNG Holdings 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 Crown LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown LNG Holdings has no effect on the direction of Fluent i.e., Fluent and Crown LNG go up and down completely randomly.
Pair Corralation between Fluent and Crown LNG
Given the investment horizon of 90 days Fluent is expected to generate 8.07 times less return on investment than Crown LNG. But when comparing it to its historical volatility, Fluent Inc is 6.98 times less risky than Crown LNG. It trades about 0.04 of its potential returns per unit of risk. Crown LNG Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.33 in Crown LNG Holdings on November 28, 2024 and sell it today you would lose (0.86) from holding Crown LNG Holdings or give up 11.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. Crown LNG Holdings
Performance |
| Timeline |
| Fluent Inc |
| Crown LNG Holdings |
Fluent and Crown LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Crown LNG
The main advantage of trading using opposite Fluent and Crown LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Crown LNG 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 Crown LNG will offset losses from the drop in Crown LNG's long position.| Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
| Crown LNG vs. Definitive Healthcare Corp | Crown LNG vs. Unilever PLC ADR | Crown LNG vs. Aperture Health | Crown LNG vs. MedX Health Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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