Correlation Between Flexible Solutions and Tourmaline Bio

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

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

Diversification Opportunities for Flexible Solutions and Tourmaline Bio

0.63

Correlation Coefficient

Flexible Solutions  Tourmaline Bio

Poor diversification

The 3 months correlation between Flexible and Tourmaline is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Tourmaline Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Bio and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with Tourmaline Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Bio has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Tourmaline Bio go up and down completely randomly.

Pair Corralation between Flexible Solutions and Tourmaline Bio

Considering the 90-day investment horizon Flexible Solutions International is expected to generate 1.63 times more return on investment than Tourmaline Bio. However, Flexible Solutions is 1.63 times more volatile than Tourmaline Bio. It trades about 0.22 of its potential returns per unit of risk. Tourmaline Bio is currently generating about 0.2 per unit of risk. If you would invest  425.00  in Flexible Solutions International on May 27, 2025 and sell it today you would earn a total of  414.00  from holding Flexible Solutions International or generate 97.41% return on investment over 90 days.

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

Flexible Solutions Internation  vs.  Tourmaline Bio

Flexible Solutions

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Solutions International are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Flexible Solutions demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Tourmaline Bio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tourmaline Bio are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating primary indicators, Tourmaline Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flexible Solutions and Tourmaline Bio

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

The idea behind Flexible Solutions International and Tourmaline Bio 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.