Correlation Between Fluent and Travelzoo
Can any of the company-specific risk be diversified away by investing in both Fluent and Travelzoo 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 Travelzoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Travelzoo, you can compare the effects of market volatilities on Fluent and Travelzoo 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 Travelzoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Travelzoo.
Diversification Opportunities for Fluent and Travelzoo
Good diversification
The 3 months correlation between Fluent and Travelzoo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo 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 Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of Fluent i.e., Fluent and Travelzoo go up and down completely randomly.
Pair Corralation between Fluent and Travelzoo
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Travelzoo. In addition to that, Fluent is 1.31 times more volatile than Travelzoo. It trades about -0.06 of its total potential returns per unit of risk. Travelzoo is currently generating about 0.18 per unit of volatility. If you would invest 1,739 in Travelzoo on August 29, 2024 and sell it today you would earn a total of 243.00 from holding Travelzoo or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fluent Inc vs. Travelzoo
Performance |
| Timeline |
| Fluent Inc |
| Travelzoo |
Fluent and Travelzoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Travelzoo
The main advantage of trading using opposite Fluent and Travelzoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Travelzoo 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 Travelzoo will offset losses from the drop in Travelzoo's long position.| Fluent vs. Capital Income Builder | Fluent vs. Direxion Daily FTSE | Fluent vs. Dodge Global Stock | Fluent vs. Collegium Pharmaceutical |
| Travelzoo vs. Dmc Global | Travelzoo vs. Air T Inc | Travelzoo vs. Deckers Outdoor | Travelzoo vs. Sonida Senior Living |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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