Correlation Between Forafric Global and Optimi Health
Can any of the company-specific risk be diversified away by investing in both Forafric Global and Optimi Health 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 Forafric Global and Optimi Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forafric Global PLC and Optimi Health Corp, you can compare the effects of market volatilities on Forafric Global and Optimi Health 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 Forafric Global with a short position of Optimi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and Optimi Health.
Diversification Opportunities for Forafric Global and Optimi Health
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Forafric and Optimi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and Optimi Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimi Health Corp and Forafric Global 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 Forafric Global PLC are associated (or correlated) with Optimi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimi Health Corp has no effect on the direction of Forafric Global i.e., Forafric Global and Optimi Health go up and down completely randomly.
Pair Corralation between Forafric Global and Optimi Health
Assuming the 90 days horizon Forafric Global PLC is expected to generate 26.26 times more return on investment than Optimi Health. However, Forafric Global is 26.26 times more volatile than Optimi Health Corp. It trades about 0.15 of its potential returns per unit of risk. Optimi Health Corp is currently generating about -0.03 per unit of risk. If you would invest 125.00 in Forafric Global PLC on September 3, 2024 and sell it today you would lose (16.00) from holding Forafric Global PLC or give up 12.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.08% |
| Values | Daily Returns |
Forafric Global PLC vs. Optimi Health Corp
Performance |
| Timeline |
| Forafric Global PLC |
| Optimi Health Corp |
Forafric Global and Optimi Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forafric Global and Optimi Health
The main advantage of trading using opposite Forafric Global and Optimi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forafric Global position performs unexpectedly, Optimi Health 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 Optimi Health will offset losses from the drop in Optimi Health's long position.| Forafric Global vs. Forafric Global PLC | Forafric Global vs. Reservoir Media Management | Forafric Global vs. Arbe Robotics Ltd | Forafric Global vs. ADS TEC ENERGY PLC |
| Optimi Health vs. Forafric Global PLC | Optimi Health vs. Forafric Global PLC | Optimi Health vs. GrainCorp Limited | Optimi Health vs. Australian Agricultural |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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