Correlation Between Flexible Solutions and Amentum Holdings
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Amentum Holdings 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 Flexible Solutions and Amentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Amentum Holdings, you can compare the effects of market volatilities on Flexible Solutions and Amentum Holdings 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 Flexible Solutions with a short position of Amentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Amentum Holdings.
Diversification Opportunities for Flexible Solutions and Amentum Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flexible and Amentum is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Amentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amentum Holdings and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with Amentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amentum Holdings has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Amentum Holdings go up and down completely randomly.
Pair Corralation between Flexible Solutions and Amentum Holdings
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 1.05 times more return on investment than Amentum Holdings. However, Flexible Solutions is 1.05 times more volatile than Amentum Holdings. It trades about 0.06 of its potential returns per unit of risk. Amentum Holdings is currently generating about -0.09 per unit of risk. If you would invest 359.00 in Flexible Solutions International on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Flexible Solutions International or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Amentum Holdings
Performance |
| Timeline |
| Flexible Solutions |
| Amentum Holdings |
Flexible Solutions and Amentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Amentum Holdings
The main advantage of trading using opposite Flexible Solutions and Amentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Amentum Holdings 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 Amentum Holdings will offset losses from the drop in Amentum Holdings' long position.| Flexible Solutions vs. LyondellBasell Industries NV | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Cabot | Flexible Solutions vs. Westlake Chemical |
| Amentum Holdings vs. Equifax | Amentum Holdings vs. Exponent | Amentum Holdings vs. FTI Consulting | Amentum Holdings vs. Franklin Covey |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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