Correlation Between Flow Capital and Tortoise Capital

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

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

Diversification Opportunities for Flow Capital and Tortoise Capital

0.04

Correlation Coefficient

Flow Capital  Tortoise Capital

Significant diversification

The 3 months correlation between Flow and Tortoise is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and Tortoise Capital Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise Capital Series and Flow Capital 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 Flow Capital Corp are associated (or correlated) with Tortoise Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise Capital Series has no effect on the direction of Flow Capital i.e., Flow Capital and Tortoise Capital go up and down completely randomly.

Pair Corralation between Flow Capital and Tortoise Capital

Assuming the 90 days horizon Flow Capital Corp is expected to generate 1.6 times more return on investment than Tortoise Capital. However, Flow Capital is 1.6 times more volatile than Tortoise Capital Series. It trades about 0.15 of its potential returns per unit of risk. Tortoise Capital Series is currently generating about 0.17 per unit of risk. If you would invest  52.00  in Flow Capital Corp on July 11, 2025 and sell it today you would earn a total of  5.00  from holding Flow Capital Corp or generate 9.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Flow Capital Corp  vs.  Tortoise Capital Series

Flow Capital Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Capital Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Flow Capital may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Tortoise Capital Series

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Capital Series are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Tortoise Capital may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Flow Capital and Tortoise Capital

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

The idea behind Flow Capital Corp and Tortoise Capital Series 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.