Correlation Between FlexShopper and CAI International

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

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

Diversification Opportunities for FlexShopper and CAI International

0.0

Correlation Coefficient

FlexShopper  CAI International

Pay attention - limited upside

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

Pair Corralation between FlexShopper and CAI International

If you would invest  99.00  in FlexShopper on January 24, 2024 and sell it today you would earn a total of  10.00  from holding FlexShopper or generate 10.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FlexShopper  vs.  CAI International

FlexShopper

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, FlexShopper is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CAI International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FlexShopper and CAI International

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

The idea behind FlexShopper and CAI International 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.