Correlation Between Stagwell and Fluent
Can any of the company-specific risk be diversified away by investing in both Stagwell and Fluent 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 Stagwell and Fluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Fluent Inc, you can compare the effects of market volatilities on Stagwell and Fluent 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 Stagwell with a short position of Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Fluent.
Diversification Opportunities for Stagwell and Fluent
Good diversification
The 3 months correlation between Stagwell and Fluent is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and Stagwell 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 Stagwell are associated (or correlated) with Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of Stagwell i.e., Stagwell and Fluent go up and down completely randomly.
Pair Corralation between Stagwell and Fluent
Given the investment horizon of 90 days Stagwell is expected to generate 0.73 times more return on investment than Fluent. However, Stagwell is 1.37 times less risky than Fluent. It trades about 0.02 of its potential returns per unit of risk. Fluent Inc is currently generating about -0.01 per unit of risk. If you would invest 732.00 in Stagwell on August 27, 2024 and sell it today you would earn a total of 50.00 from holding Stagwell or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. Fluent Inc
Performance |
| Timeline |
| Stagwell |
| Fluent Inc |
Stagwell and Fluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and Fluent
The main advantage of trading using opposite Stagwell and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, Fluent 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 Fluent will offset losses from the drop in Fluent's long position.| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications Corp |
| Fluent vs. Mirriad Advertising plc | Fluent vs. INEO Tech Corp | Fluent vs. Innovid Corp | Fluent vs. Townsquare Media |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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