Correlation Between Flow Traders and Grand Vision

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

By analyzing existing cross correlation between Flow Traders NV and Grand Vision Media, you can compare the effects of market volatilities on Flow Traders and Grand Vision 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 Flow Traders with a short position of Grand Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Grand Vision.

Diversification Opportunities for Flow Traders and Grand Vision

-0.77

Correlation Coefficient

Flow Traders  Grand Vision

Pay attention - limited upside

The 3 months correlation between Flow and Grand is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Grand Vision Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Vision Media and Flow Traders 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 Flow Traders NV are associated (or correlated) with Grand Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Vision Media has no effect on the direction of Flow Traders i.e., Flow Traders and Grand Vision go up and down completely randomly.

Pair Corralation between Flow Traders and Grand Vision

Assuming the 90 days trading horizon Flow Traders NV is expected to generate 0.44 times more return on investment than Grand Vision. However, Flow Traders NV is 2.29 times less risky than Grand Vision. It trades about 0.22 of its potential returns per unit of risk. Grand Vision Media is currently generating about -0.12 per unit of risk. If you would invest  1,794  in Flow Traders NV on September 23, 2024 and sell it today you would earn a total of  413.00  from holding Flow Traders NV or generate 23.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Flow Traders NV  vs.  Grand Vision Media

Flow Traders NV

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Traders NV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Flow Traders unveiled solid returns over the last few months and may actually be approaching a breakup point.

Grand Vision Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Vision Media 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Flow Traders and Grand Vision

The main advantage of trading using opposite Flow Traders and Grand Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Grand Vision 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 Grand Vision will offset losses from the drop in Grand Vision's long position.

The idea behind Flow Traders NV and Grand Vision Media 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.