Correlation Between Fluent and MGO Global
Can any of the company-specific risk be diversified away by investing in both Fluent and MGO Global 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 MGO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and MGO Global Common, you can compare the effects of market volatilities on Fluent and MGO Global 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 MGO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and MGO Global.
Diversification Opportunities for Fluent and MGO Global
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fluent and MGO is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of Fluent i.e., Fluent and MGO Global go up and down completely randomly.
Pair Corralation between Fluent and MGO Global
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the MGO Global. But the stock apears to be less risky and, when comparing its historical volatility, Fluent Inc is 11.7 times less risky than MGO Global. The stock trades about -0.01 of its potential returns per unit of risk. The MGO Global Common is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 985.00 in MGO Global Common on December 11, 2024 and sell it today you would lose (390.00) from holding MGO Global Common or give up 39.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.77% |
| Values | Daily Returns |
Fluent Inc vs. MGO Global Common
Performance |
| Timeline |
| Fluent Inc |
| MGO Global Common |
Risk-Adjusted Performance
Good
Weak | Strong |
Fluent and MGO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and MGO Global
The main advantage of trading using opposite Fluent and MGO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, MGO Global 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 MGO Global will offset losses from the drop in MGO Global's long position.| Fluent vs. Marchex | ||
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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