Correlation Between Fluent and Sound Point
Can any of the company-specific risk be diversified away by investing in both Fluent and Sound Point 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 Sound Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Sound Point Meridian, you can compare the effects of market volatilities on Fluent and Sound Point 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 Sound Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Sound Point.
Diversification Opportunities for Fluent and Sound Point
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fluent and Sound is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Sound Point Meridian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Point Meridian 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 Sound Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Point Meridian has no effect on the direction of Fluent i.e., Fluent and Sound Point go up and down completely randomly.
Pair Corralation between Fluent and Sound Point
Given the investment horizon of 90 days Fluent Inc is expected to generate 3.89 times more return on investment than Sound Point. However, Fluent is 3.89 times more volatile than Sound Point Meridian. It trades about 0.02 of its potential returns per unit of risk. Sound Point Meridian is currently generating about 0.02 per unit of risk. If you would invest 302.00 in Fluent Inc on September 2, 2024 and sell it today you would lose (26.00) from holding Fluent Inc or give up 8.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.98% |
| Values | Daily Returns |
Fluent Inc vs. Sound Point Meridian
Performance |
| Timeline |
| Fluent Inc |
| Sound Point Meridian |
Fluent and Sound Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Sound Point
The main advantage of trading using opposite Fluent and Sound Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Sound Point 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 Sound Point will offset losses from the drop in Sound Point's long position.The idea behind Fluent Inc and Sound Point Meridian 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.| Sound Point vs. Atlanticus Holdings | Sound Point vs. Great Elm Capital | Sound Point vs. Aquagold International | Sound Point vs. Thrivent High Yield |
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.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |