Correlation Between Forian and Ainos
Can any of the company-specific risk be diversified away by investing in both Forian and Ainos 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 Forian and Ainos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forian Inc and Ainos Inc, you can compare the effects of market volatilities on Forian and Ainos 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 Forian with a short position of Ainos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forian and Ainos.
Diversification Opportunities for Forian and Ainos
Poor diversification
The 3 months correlation between Forian and Ainos is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc and Forian 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 Forian Inc are associated (or correlated) with Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of Forian i.e., Forian and Ainos go up and down completely randomly.
Pair Corralation between Forian and Ainos
Given the investment horizon of 90 days Forian Inc is expected to generate 0.49 times more return on investment than Ainos. However, Forian Inc is 2.04 times less risky than Ainos. It trades about 0.01 of its potential returns per unit of risk. Ainos Inc is currently generating about -0.02 per unit of risk. If you would invest 237.00 in Forian Inc on August 28, 2024 and sell it today you would lose (35.00) from holding Forian Inc or give up 14.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forian Inc vs. Ainos Inc
Performance |
| Timeline |
| Forian Inc |
| Ainos Inc |
Forian and Ainos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forian and Ainos
The main advantage of trading using opposite Forian and Ainos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forian position performs unexpectedly, Ainos 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 Ainos will offset losses from the drop in Ainos' long position.The idea behind Forian Inc and Ainos Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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