Correlation Between IZafe Group and Flexion Mobile

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Can any of the company-specific risk be diversified away by investing in both IZafe Group and Flexion Mobile 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 IZafe Group and Flexion Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iZafe Group AB and Flexion Mobile PLC, you can compare the effects of market volatilities on IZafe Group and Flexion Mobile 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 IZafe Group with a short position of Flexion Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of IZafe Group and Flexion Mobile.

Diversification Opportunities for IZafe Group and Flexion Mobile

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between IZafe and Flexion is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding iZafe Group AB and Flexion Mobile PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexion Mobile PLC and IZafe Group 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 iZafe Group AB are associated (or correlated) with Flexion Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexion Mobile PLC has no effect on the direction of IZafe Group i.e., IZafe Group and Flexion Mobile go up and down completely randomly.

Pair Corralation between IZafe Group and Flexion Mobile

Assuming the 90 days trading horizon iZafe Group AB is expected to generate 2.31 times more return on investment than Flexion Mobile. However, IZafe Group is 2.31 times more volatile than Flexion Mobile PLC. It trades about 0.01 of its potential returns per unit of risk. Flexion Mobile PLC is currently generating about -0.03 per unit of risk. If you would invest  38.00  in iZafe Group AB on August 24, 2024 and sell it today you would lose (18.00) from holding iZafe Group AB or give up 47.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

iZafe Group AB  vs.  Flexion Mobile PLC

 Performance 
       Timeline  
iZafe Group AB 

Risk-Adjusted Performance

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Over the last 90 days iZafe Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, IZafe Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Flexion Mobile PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Flexion Mobile PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

IZafe Group and Flexion Mobile Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IZafe Group and Flexion Mobile

The main advantage of trading using opposite IZafe Group and Flexion Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IZafe Group position performs unexpectedly, Flexion Mobile 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 Flexion Mobile will offset losses from the drop in Flexion Mobile's long position.
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The idea behind iZafe Group AB and Flexion Mobile PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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