Correlation Between Forian and Avinger
Can any of the company-specific risk be diversified away by investing in both Forian and Avinger 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 Avinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forian Inc and Avinger, you can compare the effects of market volatilities on Forian and Avinger 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 Avinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forian and Avinger.
Diversification Opportunities for Forian and Avinger
Poor diversification
The 3 months correlation between Forian and Avinger is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and Avinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avinger 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 Avinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avinger has no effect on the direction of Forian i.e., Forian and Avinger go up and down completely randomly.
Pair Corralation between Forian and Avinger
Given the investment horizon of 90 days Forian Inc is expected to under-perform the Avinger. But the stock apears to be less risky and, when comparing its historical volatility, Forian Inc is 1.45 times less risky than Avinger. The stock trades about -0.04 of its potential returns per unit of risk. The Avinger is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 82.00 in Avinger on August 28, 2024 and sell it today you would lose (2.00) from holding Avinger or give up 2.44% 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. Avinger
Performance |
| Timeline |
| Forian Inc |
| Avinger |
Forian and Avinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forian and Avinger
The main advantage of trading using opposite Forian and Avinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forian position performs unexpectedly, Avinger 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 Avinger will offset losses from the drop in Avinger's long position.| Forian vs. HealthStream | Forian vs. National Research Corp | Forian vs. HealthEquity | Forian vs. Health Catalyst |
| Avinger vs. GlucoTrack | Avinger vs. Nexgel Inc | Avinger vs. Sharps Technology | Avinger vs. Innovative Eyewear |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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