Correlation Between CO2 Energy and Flexible Solutions

Can any of the company-specific risk be diversified away by investing in both CO2 Energy and Flexible Solutions 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 CO2 Energy and Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CO2 Energy Transition and Flexible Solutions International, you can compare the effects of market volatilities on CO2 Energy and Flexible Solutions 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 CO2 Energy with a short position of Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of CO2 Energy and Flexible Solutions.

Diversification Opportunities for CO2 Energy and Flexible Solutions

0.63

Correlation Coefficient

CO2 Energy  Flexible Solutions

Poor diversification

The 3 months correlation between CO2 and Flexible is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CO2 Energy Transition and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions and CO2 Energy 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 CO2 Energy Transition are associated (or correlated) with Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of CO2 Energy i.e., CO2 Energy and Flexible Solutions go up and down completely randomly.

Pair Corralation between CO2 Energy and Flexible Solutions

Assuming the 90 days horizon CO2 Energy is expected to generate 13.89 times less return on investment than Flexible Solutions. But when comparing it to its historical volatility, CO2 Energy Transition is 11.52 times less risky than Flexible Solutions. It trades about 0.14 of its potential returns per unit of risk. Flexible Solutions International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  366.00  in Flexible Solutions International on May 1, 2025 and sell it today you would earn a total of  177.00  from holding Flexible Solutions International or generate 48.36% return on investment over 90 days.

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

CO2 Energy Transition  vs.  Flexible Solutions Internation

CO2 Energy Transition

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CO2 Energy Transition are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, CO2 Energy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Flexible Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Solutions International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Flexible Solutions demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CO2 Energy and Flexible Solutions

The main advantage of trading using opposite CO2 Energy and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CO2 Energy position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.

The idea behind CO2 Energy Transition and Flexible Solutions 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.