Correlation Between Solution Financial and FlexShopper
Can any of the company-specific risk be diversified away by investing in both Solution Financial and FlexShopper 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 Solution Financial and FlexShopper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Financial and FlexShopper, you can compare the effects of market volatilities on Solution Financial and FlexShopper 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 Solution Financial with a short position of FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Financial and FlexShopper.
Diversification Opportunities for Solution Financial and FlexShopper
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solution and FlexShopper is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Solution Financial and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper and Solution Financial 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 Solution Financial are associated (or correlated) with FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of Solution Financial i.e., Solution Financial and FlexShopper go up and down completely randomly.
Pair Corralation between Solution Financial and FlexShopper
Assuming the 90 days horizon Solution Financial is expected to under-perform the FlexShopper. But the pink sheet apears to be less risky and, when comparing its historical volatility, Solution Financial is 1.6 times less risky than FlexShopper. The pink sheet trades about 0.0 of its potential returns per unit of risk. The FlexShopper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 112.00 in FlexShopper on November 2, 2024 and sell it today you would earn a total of 35.00 from holding FlexShopper or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Solution Financial vs. FlexShopper
Performance |
| Timeline |
| Solution Financial |
| FlexShopper |
Solution Financial and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Financial and FlexShopper
The main advantage of trading using opposite Solution Financial and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Financial position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper's long position.| Solution Financial vs. Ashtead Group plc | Solution Financial vs. African Discovery Group | Solution Financial vs. Emeco Holdings Limited | Solution Financial vs. BOC Aviation Limited |
| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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