Correlation Between Flux Power and Protective Life

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Can any of the company-specific risk be diversified away by investing in both Flux Power and Protective Life 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 Flux Power and Protective Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flux Power Holdings and Protective Life Dynamic, you can compare the effects of market volatilities on Flux Power and Protective Life 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 Flux Power with a short position of Protective Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Protective Life.

Diversification Opportunities for Flux Power and Protective Life

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Flux and Protective is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and PROTECTIVE LIFE DYNAMIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protective Life Dynamic and Flux Power 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 Flux Power Holdings are associated (or correlated) with Protective Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protective Life Dynamic has no effect on the direction of Flux Power i.e., Flux Power and Protective Life go up and down completely randomly.

Pair Corralation between Flux Power and Protective Life

If you would invest  254.00  in Flux Power Holdings on December 29, 2023 and sell it today you would earn a total of  181.00  from holding Flux Power Holdings or generate 71.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Flux Power Holdings  vs.  PROTECTIVE LIFE DYNAMIC

 Performance 
       Timeline  
Flux Power Holdings 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Flux Power Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Flux Power showed solid returns over the last few months and may actually be approaching a breakup point.
Protective Life Dynamic 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Protective Life Dynamic has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Protective Life is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Flux Power and Protective Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Flux Power and Protective Life

The main advantage of trading using opposite Flux Power and Protective Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power position performs unexpectedly, Protective Life 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 Protective Life will offset losses from the drop in Protective Life's long position.
The idea behind Flux Power Holdings and Protective Life Dynamic 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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