Correlation Between Fluent and Rackspace Technology

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

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

Diversification Opportunities for Fluent and Rackspace Technology

0.54

Correlation Coefficient

Fluent  Rackspace Technology

Very weak diversification

The 3 months correlation between Fluent and Rackspace is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Rackspace Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackspace Technology and Fluent 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 Fluent Inc are associated (or correlated) with Rackspace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackspace Technology has no effect on the direction of Fluent i.e., Fluent and Rackspace Technology go up and down completely randomly.

Pair Corralation between Fluent and Rackspace Technology

Given the investment horizon of 90 days Fluent Inc is expected to generate 1.03 times more return on investment than Rackspace Technology. However, Fluent is 1.03 times more volatile than Rackspace Technology. It trades about 0.01 of its potential returns per unit of risk. Rackspace Technology is currently generating about -0.03 per unit of risk. If you would invest  222.00  in Fluent Inc on May 5, 2025 and sell it today you would lose (12.00) from holding Fluent Inc or give up 5.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fluent Inc  vs.  Rackspace Technology

Fluent Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Rackspace Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rackspace Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Fluent and Rackspace Technology

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

The idea behind Fluent Inc and Rackspace Technology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.