Correlation Between John Wiley and Fluent

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

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

Diversification Opportunities for John Wiley and Fluent

-0.64

Correlation Coefficient

John Wiley  Fluent

Excellent diversification

The 3 months correlation between John and Fluent is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding John Wiley Sons and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and John Wiley 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 John Wiley Sons 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 John Wiley i.e., John Wiley and Fluent go up and down completely randomly.

Pair Corralation between John Wiley and Fluent

Given the investment horizon of 90 days John Wiley Sons is expected to generate 0.55 times more return on investment than Fluent. However, John Wiley Sons is 1.83 times less risky than Fluent. It trades about 0.19 of its potential returns per unit of risk. Fluent Inc is currently generating about 0.04 per unit of risk. If you would invest  3,275  in John Wiley Sons on February 1, 2024 and sell it today you would earn a total of  525.00  from holding John Wiley Sons or generate 16.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.61%
Values	Daily Returns

John Wiley Sons  vs.  Fluent Inc

John Wiley Sons

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Wiley Sons are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, John Wiley sustained solid returns over the last few months and may actually be approaching a breakup point.

Fluent Inc

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Fluent may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with John Wiley and Fluent

The main advantage of trading using opposite John Wiley and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Wiley 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 John Wiley Sons 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.