Correlation Between Bird Global and FlexShopper

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

Diversification Opportunities for Bird Global and FlexShopper

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bird and FlexShopper is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bird Global and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper and Bird 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 Bird Global are associated (or correlated) with FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of Bird Global i.e., Bird Global and FlexShopper go up and down completely randomly.

Pair Corralation between Bird Global and FlexShopper

Given the investment horizon of 90 days Bird Global is expected to under-perform the FlexShopper. In addition to that, Bird Global is 1.96 times more volatile than FlexShopper. It trades about -0.06 of its total potential returns per unit of risk. FlexShopper is currently generating about 0.02 per unit of volatility. If you would invest  155.00  in FlexShopper on December 29, 2023 and sell it today you would lose (18.00) from holding FlexShopper or give up 11.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.14%
ValuesDaily Returns

Bird Global  vs.  FlexShopper

 Performance 
       Timeline  
Bird Global 

Risk-Adjusted Performance

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High
OK
Over the last 90 days Bird Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain fundamental indicators, Bird Global unveiled solid returns over the last few months and may actually be approaching a breakup point.
FlexShopper 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days FlexShopper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Bird Global and FlexShopper Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bird Global and FlexShopper

The main advantage of trading using opposite Bird Global and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bird Global position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper's long position.
The idea behind Bird Global and FlexShopper 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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