Correlation Between FlexShopper and Fortress Transportation

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

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

Diversification Opportunities for FlexShopper and Fortress Transportation

0.33

Correlation Coefficient

FlexShopper  Fortress Transportation

Weak diversification

The 3 months correlation between FlexShopper and Fortress is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and Fortress Transportation and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transportation and FlexShopper 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 FlexShopper are associated (or correlated) with Fortress Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transportation has no effect on the direction of FlexShopper i.e., FlexShopper and Fortress Transportation go up and down completely randomly.

Pair Corralation between FlexShopper and Fortress Transportation

Given the investment horizon of 90 days FlexShopper is expected to generate 5.77 times more return on investment than Fortress Transportation. However, FlexShopper is 5.77 times more volatile than Fortress Transportation and. It trades about 0.14 of its potential returns per unit of risk. Fortress Transportation and is currently generating about 0.07 per unit of risk. If you would invest  110.00  in FlexShopper on September 3, 2024 and sell it today you would earn a total of  88.00  from holding FlexShopper or generate 80.0% return on investment over 90 days.

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

FlexShopper  vs.  Fortress Transportation and

FlexShopper

Risk-Adjusted Performance

17 of 100

Solid

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

Fortress Transportation

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transportation and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Fortress Transportation is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FlexShopper and Fortress Transportation

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

The idea behind FlexShopper and Fortress Transportation and 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.