Correlation Between Forth Smart and Lease IT
Can any of the company-specific risk be diversified away by investing in both Forth Smart and Lease IT 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 Forth Smart and Lease IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forth Smart Service and Lease IT Public, you can compare the effects of market volatilities on Forth Smart and Lease IT 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 Forth Smart with a short position of Lease IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Smart and Lease IT.
Diversification Opportunities for Forth Smart and Lease IT
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Forth and Lease is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Forth Smart Service and Lease IT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lease IT Public and Forth Smart 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 Forth Smart Service are associated (or correlated) with Lease IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lease IT Public has no effect on the direction of Forth Smart i.e., Forth Smart and Lease IT go up and down completely randomly.
Pair Corralation between Forth Smart and Lease IT
Assuming the 90 days trading horizon Forth Smart Service is expected to generate 2.46 times more return on investment than Lease IT. However, Forth Smart is 2.46 times more volatile than Lease IT Public. It trades about 0.29 of its potential returns per unit of risk. Lease IT Public is currently generating about -0.5 per unit of risk. If you would invest 605.00 in Forth Smart Service on September 5, 2024 and sell it today you would earn a total of 280.00 from holding Forth Smart Service or generate 46.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Forth Smart Service vs. Lease IT Public
Performance |
| Timeline |
| Forth Smart Service |
| Lease IT Public |
Forth Smart and Lease IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forth Smart and Lease IT
The main advantage of trading using opposite Forth Smart and Lease IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forth Smart position performs unexpectedly, Lease IT 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 Lease IT will offset losses from the drop in Lease IT's long position.| Forth Smart vs. Forth Public | Forth Smart vs. Hana Microelectronics Public | Forth Smart vs. AP Public | Forth Smart vs. Home Product Center |
| Lease IT vs. Multibax Public | Lease IT vs. Forth Smart Service | Lease IT vs. LPN Development Public | Lease IT vs. Netbay Public |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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