Correlation Between FlexShopper and Fortress Transp
Can any of the company-specific risk be diversified away by investing in both FlexShopper and Fortress Transp 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 Fortress Transp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShopper and Fortress Transp Infra, you can compare the effects of market volatilities on FlexShopper and Fortress Transp 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 Fortress Transp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShopper and Fortress Transp.
Diversification Opportunities for FlexShopper and Fortress Transp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FlexShopper and Fortress is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra 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 Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of FlexShopper i.e., FlexShopper and Fortress Transp go up and down completely randomly.
Pair Corralation between FlexShopper and Fortress Transp
Given the investment horizon of 90 days FlexShopper is expected to generate 1.83 times more return on investment than Fortress Transp. However, FlexShopper is 1.83 times more volatile than Fortress Transp Infra. It trades about 0.18 of its potential returns per unit of risk. Fortress Transp Infra is currently generating about 0.31 per unit of risk. If you would invest 134.00 in FlexShopper on August 23, 2024 and sell it today you would earn a total of 32.00 from holding FlexShopper or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShopper vs. Fortress Transp Infra
Performance |
| Timeline |
| FlexShopper |
| Fortress Transp Infra |
FlexShopper and Fortress Transp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShopper and Fortress Transp
The main advantage of trading using opposite FlexShopper and Fortress Transp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShopper position performs unexpectedly, Fortress Transp 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 Fortress Transp will offset losses from the drop in Fortress Transp's long position.| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
| Fortress Transp vs. HE Equipment Services | Fortress Transp vs. Air Lease | Fortress Transp vs. Aquagold International | Fortress Transp vs. Small Cap Core |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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