Correlation Between Glory Star and Fluent

Can any of the company-specific risk be diversified away by investing in both Glory Star 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 Glory Star and Fluent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glory Star New and Fluent Inc, you can compare the effects of market volatilities on Glory Star 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 Glory Star with a short position of Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glory Star and Fluent.

Diversification Opportunities for Glory Star and Fluent

-0.05

Correlation Coefficient

Glory Star  Fluent

Good diversification

The 3 months correlation between Glory and Fluent is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Glory Star New and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and Glory Star 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 Glory Star New 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 Glory Star i.e., Glory Star and Fluent go up and down completely randomly.

Pair Corralation between Glory Star and Fluent

Assuming the 90 days horizon Glory Star New is expected to generate 6.25 times more return on investment than Fluent. However, Glory Star is 6.25 times more volatile than Fluent Inc. It trades about 0.1 of its potential returns per unit of risk. Fluent Inc is currently generating about -0.01 per unit of risk. If you would invest  1.35  in Glory Star New on February 20, 2024 and sell it today you would lose (0.93) from holding Glory Star New or give up 68.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.55%
Values	Daily Returns

Glory Star New  vs.  Fluent Inc

Glory Star New

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Glory Star New are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Glory Star showed solid returns over the last few months and may actually be approaching a breakup point.

Fluent Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fluent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glory Star and Fluent

The main advantage of trading using opposite Glory Star and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glory Star 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.

The idea behind Glory Star New and Fluent Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.