Correlation Between Stem and Fubotv
Can any of the company-specific risk be diversified away by investing in both Stem and Fubotv 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 Stem and Fubotv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stem Inc and Fubotv Inc, you can compare the effects of market volatilities on Stem and Fubotv 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 Stem with a short position of Fubotv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stem and Fubotv.
Diversification Opportunities for Stem and Fubotv
Poor diversification
The 3 months correlation between Stem and Fubotv is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Stem Inc and Fubotv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubotv Inc and Stem 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 Stem Inc are associated (or correlated) with Fubotv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubotv Inc has no effect on the direction of Stem i.e., Stem and Fubotv go up and down completely randomly.
Pair Corralation between Stem and Fubotv
Given the investment horizon of 90 days Stem Inc is expected to under-perform the Fubotv. But the stock apears to be less risky and, when comparing its historical volatility, Stem Inc is 1.56 times less risky than Fubotv. The stock trades about -0.03 of its potential returns per unit of risk. The Fubotv Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 207.00 in Fubotv Inc on November 2, 2024 and sell it today you would earn a total of 205.00 from holding Fubotv Inc or generate 99.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stem Inc vs. Fubotv Inc
Performance |
| Timeline |
| Stem Inc |
| Fubotv Inc |
Stem and Fubotv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stem and Fubotv
The main advantage of trading using opposite Stem and Fubotv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stem position performs unexpectedly, Fubotv 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 Fubotv will offset losses from the drop in Fubotv's long position.| Stem vs. Palo Alto Networks | Stem vs. Crowdstrike Holdings | Stem vs. Cloudflare | Stem vs. Palantir Technologies Class |
| Fubotv vs. Cumulus Media Class | Fubotv vs. iHeartMedia Class A | Fubotv vs. Gray Television | Fubotv vs. E W Scripps |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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