Correlation Between Flexible Solutions and Iofina Plc
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Iofina Plc 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 Iofina Plc 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 Iofina plc, you can compare the effects of market volatilities on Flexible Solutions and Iofina Plc 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 Iofina Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Iofina Plc.
Diversification Opportunities for Flexible Solutions and Iofina Plc
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flexible and Iofina is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Iofina plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iofina plc 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 Iofina Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iofina plc has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Iofina Plc go up and down completely randomly.
Pair Corralation between Flexible Solutions and Iofina Plc
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 1.26 times more return on investment than Iofina Plc. However, Flexible Solutions is 1.26 times more volatile than Iofina plc. It trades about 0.14 of its potential returns per unit of risk. Iofina plc is currently generating about 0.01 per unit of risk. If you would invest 216.00 in Flexible Solutions International on August 26, 2024 and sell it today you would earn a total of 186.00 from holding Flexible Solutions International or generate 86.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Iofina plc
Performance |
| Timeline |
| Flexible Solutions |
| Iofina plc |
Flexible Solutions and Iofina Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Iofina Plc
The main advantage of trading using opposite Flexible Solutions and Iofina Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Iofina Plc 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 Iofina Plc will offset losses from the drop in Iofina Plc's long position.| Flexible Solutions vs. Minerals Technologies | Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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