Correlation Between Fleetcor Technologies and Cumulus Media

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

By analyzing existing cross correlation between Fleetcor Technologies and Cumulus Media Class, you can compare the effects of market volatilities on Fleetcor Technologies and Cumulus Media 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 Fleetcor Technologies with a short position of Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fleetcor Technologies and Cumulus Media.

Diversification Opportunities for Fleetcor Technologies and Cumulus Media

-0.05

Correlation Coefficient

Fleetcor Technologies  Cumulus Media

Good diversification

The 3 months correlation between Fleetcor and Cumulus is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fleetcor Technologies and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class and Fleetcor Technologies 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 Fleetcor Technologies are associated (or correlated) with Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Fleetcor Technologies i.e., Fleetcor Technologies and Cumulus Media go up and down completely randomly.

Pair Corralation between Fleetcor Technologies and Cumulus Media

If you would invest  70.00  in Cumulus Media Class on September 24, 2024 and sell it today you would earn a total of  3.00  from holding Cumulus Media Class or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Fleetcor Technologies  vs.  Cumulus Media Class

Fleetcor Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fleetcor Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Fleetcor Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cumulus Media Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cumulus Media Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential 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 Fleetcor Technologies and Cumulus Media

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

The idea behind Fleetcor Technologies and Cumulus Media Class 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.