Correlation Between Fluent and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Fluent and Maanshan Iron 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 Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Maanshan Iron Steel, you can compare the effects of market volatilities on Fluent and Maanshan Iron 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 Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Maanshan Iron.
Diversification Opportunities for Fluent and Maanshan Iron
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fluent and Maanshan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel 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 Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Fluent i.e., Fluent and Maanshan Iron go up and down completely randomly.
Pair Corralation between Fluent and Maanshan Iron
Given the investment horizon of 90 days Fluent Inc is expected to generate 1.03 times more return on investment than Maanshan Iron. However, Fluent is 1.03 times more volatile than Maanshan Iron Steel. It trades about -0.05 of its potential returns per unit of risk. Maanshan Iron Steel is currently generating about -0.22 per unit of risk. If you would invest 296.00 in Fluent Inc on September 1, 2024 and sell it today you would lose (20.00) from holding Fluent Inc or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. Maanshan Iron Steel
Performance |
| Timeline |
| Fluent Inc |
| Maanshan Iron Steel |
Fluent and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Maanshan Iron
The main advantage of trading using opposite Fluent and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.The idea behind Fluent Inc and Maanshan Iron Steel 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.| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. Steel Dynamics | Maanshan Iron vs. Universal Stainless Alloy |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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