Correlation Between Forstrong Global and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Forstrong Global and Kinaxis 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 Forstrong Global and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and Kinaxis, you can compare the effects of market volatilities on Forstrong Global and Kinaxis 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 Forstrong Global with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and Kinaxis.
Diversification Opportunities for Forstrong Global and Kinaxis
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forstrong and Kinaxis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Forstrong 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 Forstrong Global Income are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Forstrong Global i.e., Forstrong Global and Kinaxis go up and down completely randomly.
Pair Corralation between Forstrong Global and Kinaxis
Assuming the 90 days trading horizon Forstrong Global Income is expected to under-perform the Kinaxis. But the etf apears to be less risky and, when comparing its historical volatility, Forstrong Global Income is 6.27 times less risky than Kinaxis. The etf trades about -0.08 of its potential returns per unit of risk. The Kinaxis is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 15,608 in Kinaxis on August 28, 2024 and sell it today you would earn a total of 2,112 from holding Kinaxis or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forstrong Global Income vs. Kinaxis
Performance |
| Timeline |
| Forstrong Global Income |
| Kinaxis |
Forstrong Global and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and Kinaxis
The main advantage of trading using opposite Forstrong Global and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' long position.| Forstrong Global vs. Forstrong Global Ex North | Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. Forstrong Emerging Markets | Forstrong Global vs. NBI High Yield |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |