Correlation Between Sharing Economy and Flywire Corp

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

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

Diversification Opportunities for Sharing Economy and Flywire Corp

-0.31

Correlation Coefficient

Sharing Economy  Flywire Corp

Very good diversification

The 3 months correlation between Sharing and Flywire is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sharing Economy International and Flywire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flywire Corp and Sharing Economy 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 Sharing Economy International are associated (or correlated) with Flywire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flywire Corp has no effect on the direction of Sharing Economy i.e., Sharing Economy and Flywire Corp go up and down completely randomly.

Pair Corralation between Sharing Economy and Flywire Corp

If you would invest  1,666  in Flywire Corp on September 18, 2024 and sell it today you would earn a total of  447.00  from holding Flywire Corp or generate 26.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sharing Economy International  vs.  Flywire Corp

Sharing Economy Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharing Economy International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Sharing Economy is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Flywire Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flywire Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Flywire Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharing Economy and Flywire Corp

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

The idea behind Sharing Economy International and Flywire 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.