Correlation Between Fluor and Api Group

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

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

Diversification Opportunities for Fluor and Api Group

0.51

Correlation Coefficient

Fluor  Api Group

Very weak diversification

The 3 months correlation between Fluor and Api is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and Api Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Group Corp and Fluor 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 Fluor are associated (or correlated) with Api Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Api Group Corp has no effect on the direction of Fluor i.e., Fluor and Api Group go up and down completely randomly.

Pair Corralation between Fluor and Api Group

Considering the 90-day investment horizon Fluor is expected to generate 1.33 times less return on investment than Api Group. In addition to that, Fluor is 2.32 times more volatile than Api Group Corp. It trades about 0.06 of its total potential returns per unit of risk. Api Group Corp is currently generating about 0.19 per unit of volatility. If you would invest  3,525  in Api Group Corp on September 4, 2024 and sell it today you would earn a total of  240.00  from holding Api Group Corp or generate 6.81% return on investment over 90 days.

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

Fluor  vs.  Api Group Corp

Fluor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fluor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating essential indicators, Fluor reported solid returns over the last few months and may actually be approaching a breakup point.

Api Group Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Api Group Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Api Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fluor and Api Group

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

The idea behind Fluor and Api Group Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.