Correlation Between Flexible Solutions and Global Net
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Flexible Solutions and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Global Net.
Diversification Opportunities for Flexible Solutions and Global Net
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flexible and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Global Net go up and down completely randomly.
Pair Corralation between Flexible Solutions and Global Net
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Global Net. In addition to that, Flexible Solutions is 4.18 times more volatile than Global Net Lease. It trades about -0.15 of its total potential returns per unit of risk. Global Net Lease is currently generating about 0.01 per unit of volatility. If you would invest 2,291 in Global Net Lease on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Global Net Lease or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Global Net Lease
Performance |
| Timeline |
| Flexible Solutions |
| Global Net Lease |
Flexible Solutions and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Global Net
The main advantage of trading using opposite Flexible Solutions and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| Global Net vs. Triton International Limited | Global Net vs. BBB Foods | Global Net vs. Avis Budget Group | Global Net vs. Bridgford Foods |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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