Correlation Between Forian and MaxCyte
Can any of the company-specific risk be diversified away by investing in both Forian and MaxCyte 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 MaxCyte into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forian Inc and MaxCyte, you can compare the effects of market volatilities on Forian and MaxCyte 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 MaxCyte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forian and MaxCyte.
Diversification Opportunities for Forian and MaxCyte
Very poor diversification
The 3 months correlation between Forian and MaxCyte is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and MaxCyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxCyte 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 MaxCyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxCyte has no effect on the direction of Forian i.e., Forian and MaxCyte go up and down completely randomly.
Pair Corralation between Forian and MaxCyte
Given the investment horizon of 90 days Forian Inc is expected to under-perform the MaxCyte. But the stock apears to be less risky and, when comparing its historical volatility, Forian Inc is 1.34 times less risky than MaxCyte. The stock trades about -0.08 of its potential returns per unit of risk. The MaxCyte is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 444.00 in MaxCyte on August 30, 2024 and sell it today you would lose (92.00) from holding MaxCyte or give up 20.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forian Inc vs. MaxCyte
Performance |
| Timeline |
| Forian Inc |
| MaxCyte |
Forian and MaxCyte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forian and MaxCyte
The main advantage of trading using opposite Forian and MaxCyte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forian position performs unexpectedly, MaxCyte 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 MaxCyte will offset losses from the drop in MaxCyte's long position.| Forian vs. HealthStream | Forian vs. National Research Corp | Forian vs. HealthEquity | Forian vs. Health Catalyst |
| MaxCyte vs. ReShape Lifesciences | MaxCyte vs. Bone Biologics Corp | MaxCyte vs. Tivic Health Systems | MaxCyte vs. Nuwellis |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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