Correlation Between Flow Capital and Tortoise Energy

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

By analyzing existing cross correlation between Flow Capital Corp and Tortoise Energy Independence, you can compare the effects of market volatilities on Flow Capital and Tortoise Energy 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 Capital with a short position of Tortoise Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Capital and Tortoise Energy.

Diversification Opportunities for Flow Capital and Tortoise Energy

0.48

Correlation Coefficient

Flow Capital  Tortoise Energy

Very weak diversification

The 3 months correlation between Flow and Tortoise is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and Tortoise Energy Independence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise Energy Inde and Flow Capital 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 Capital Corp are associated (or correlated) with Tortoise Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise Energy Inde has no effect on the direction of Flow Capital i.e., Flow Capital and Tortoise Energy go up and down completely randomly.

Pair Corralation between Flow Capital and Tortoise Energy

Assuming the 90 days horizon Flow Capital Corp is expected to generate 2.02 times more return on investment than Tortoise Energy. However, Flow Capital is 2.02 times more volatile than Tortoise Energy Independence. It trades about 0.13 of its potential returns per unit of risk. Tortoise Energy Independence is currently generating about 0.22 per unit of risk. If you would invest  51.00  in Flow Capital Corp on September 2, 2024 and sell it today you would earn a total of  10.00  from holding Flow Capital Corp or generate 19.61% return on investment over 90 days.

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

Flow Capital Corp  vs.  Tortoise Energy Independence

Flow Capital Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Capital Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Flow Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Tortoise Energy Inde

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Energy Independence are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively fragile fundamental indicators, Tortoise Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flow Capital and Tortoise Energy

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

The idea behind Flow Capital Corp and Tortoise Energy Independence 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.