Correlation Between FlexShopper and Black Diamond
Can any of the company-specific risk be diversified away by investing in both FlexShopper and Black Diamond 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 FlexShopper and Black Diamond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShopper and Black Diamond Group, you can compare the effects of market volatilities on FlexShopper and Black Diamond 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 FlexShopper with a short position of Black Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShopper and Black Diamond.
Diversification Opportunities for FlexShopper and Black Diamond
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FlexShopper and Black is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and Black Diamond Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Diamond Group and FlexShopper 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 FlexShopper are associated (or correlated) with Black Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Diamond Group has no effect on the direction of FlexShopper i.e., FlexShopper and Black Diamond go up and down completely randomly.
Pair Corralation between FlexShopper and Black Diamond
Given the investment horizon of 90 days FlexShopper is expected to generate 2.43 times more return on investment than Black Diamond. However, FlexShopper is 2.43 times more volatile than Black Diamond Group. It trades about 0.04 of its potential returns per unit of risk. Black Diamond Group is currently generating about 0.08 per unit of risk. If you would invest 115.00 in FlexShopper on October 21, 2024 and sell it today you would earn a total of 51.00 from holding FlexShopper or generate 44.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.6% |
| Values | Daily Returns |
FlexShopper vs. Black Diamond Group
Performance |
| Timeline |
| FlexShopper |
| Black Diamond Group |
FlexShopper and Black Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShopper and Black Diamond
The main advantage of trading using opposite FlexShopper and Black Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShopper position performs unexpectedly, Black Diamond 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 Black Diamond will offset losses from the drop in Black Diamond's long position.| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
| Black Diamond vs. BOC Aviation Limited | Black Diamond vs. Alta Equipment Group | Black Diamond vs. Ashtead Group plc | Black Diamond vs. African Discovery Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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