Correlation Between Forian and Lucid Diagnostics
Can any of the company-specific risk be diversified away by investing in both Forian and Lucid Diagnostics 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 Lucid Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forian Inc and Lucid Diagnostics, you can compare the effects of market volatilities on Forian and Lucid Diagnostics 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 Lucid Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forian and Lucid Diagnostics.
Diversification Opportunities for Forian and Lucid Diagnostics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Forian and Lucid is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and Lucid Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Diagnostics 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 Lucid Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Diagnostics has no effect on the direction of Forian i.e., Forian and Lucid Diagnostics go up and down completely randomly.
Pair Corralation between Forian and Lucid Diagnostics
Given the investment horizon of 90 days Forian Inc is expected to generate 1.27 times more return on investment than Lucid Diagnostics. However, Forian is 1.27 times more volatile than Lucid Diagnostics. It trades about 0.01 of its potential returns per unit of risk. Lucid Diagnostics is currently generating about -0.01 per unit of risk. If you would invest 273.00 in Forian Inc on August 28, 2024 and sell it today you would lose (71.00) from holding Forian Inc or give up 26.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forian Inc vs. Lucid Diagnostics
Performance |
| Timeline |
| Forian Inc |
| Lucid Diagnostics |
Forian and Lucid Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forian and Lucid Diagnostics
The main advantage of trading using opposite Forian and Lucid Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forian position performs unexpectedly, Lucid Diagnostics 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 Lucid Diagnostics will offset losses from the drop in Lucid Diagnostics' long position.| Forian vs. HealthStream | Forian vs. National Research Corp | Forian vs. HealthEquity | Forian vs. Health Catalyst |
| Lucid Diagnostics vs. Inari Medical | Lucid Diagnostics vs. Beyond Air | Lucid Diagnostics vs. Clearpoint Neuro | Lucid Diagnostics vs. LivaNova PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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