Correlation Between Flux Power and Alleghany
Can any of the company-specific risk be diversified away by investing in both Flux Power and Alleghany 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 Alleghany 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 Alleghany, you can compare the effects of market volatilities on Flux Power and Alleghany 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 Alleghany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Alleghany.
Diversification Opportunities for Flux Power and Alleghany
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flux and Alleghany is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and Alleghany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleghany 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 Alleghany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleghany has no effect on the direction of Flux Power i.e., Flux Power and Alleghany go up and down completely randomly.
Pair Corralation between Flux Power and Alleghany
If you would invest 392.00 in Flux Power Holdings on January 19, 2024 and sell it today you would earn a total of 33.00 from holding Flux Power Holdings or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Flux Power Holdings vs. Alleghany
Performance |
| Timeline |
| Flux Power Holdings |
| Alleghany |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Flux Power and Alleghany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flux Power and Alleghany
The main advantage of trading using opposite Flux Power and Alleghany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power position performs unexpectedly, Alleghany 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 Alleghany will offset losses from the drop in Alleghany's long position.| Flux Power vs. Energizer Holdings | Flux Power vs. Hollysys Automation Technologies | Flux Power vs. Espey Mfg Electronics | Flux Power vs. Preformed Line Products |
| Alleghany vs. Chester Mining | Alleghany vs. Inflection Point Acquisition | Alleghany vs. Fortress Transp Infra | Alleghany vs. Vestis |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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