Correlation Between MGO Global and Fluent

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

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

Diversification Opportunities for MGO Global and Fluent

0.49

Correlation Coefficient

MGO Global  Fluent

Very weak diversification

The 3 months correlation between MGO and Fluent is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MGO Global Common and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and MGO Global 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 MGO Global Common are associated (or correlated) with Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of MGO Global i.e., MGO Global and Fluent go up and down completely randomly.

Pair Corralation between MGO Global and Fluent

Given the investment horizon of 90 days MGO Global Common is expected to generate 5.4 times more return on investment than Fluent. However, MGO Global is 5.4 times more volatile than Fluent Inc. It trades about 0.02 of its potential returns per unit of risk. Fluent Inc is currently generating about 0.0 per unit of risk. If you would invest  2,280  in MGO Global Common on September 12, 2024 and sell it today you would lose (2,058) from holding MGO Global Common or give up 90.26% of portfolio value over 90 days.

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

MGO Global Common  vs.  Fluent Inc

MGO Global Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MGO Global Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MGO Global is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Fluent Inc

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fluent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MGO Global and Fluent

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

The idea behind MGO Global Common and Fluent Inc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.