Correlation Between After You and Forth Public

Can any of the company-specific risk be diversified away by investing in both After You and Forth Public 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 After You and Forth Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between After You Public and Forth Public, you can compare the effects of market volatilities on After You and Forth Public 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 After You with a short position of Forth Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of After You and Forth Public.

Diversification Opportunities for After You and Forth Public

-0.81

Correlation Coefficient

After You  Forth Public

Pay attention - limited upside

The 3 months correlation between After and Forth is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding After You Public and Forth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forth Public and After You 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 After You Public are associated (or correlated) with Forth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forth Public has no effect on the direction of After You i.e., After You and Forth Public go up and down completely randomly.

Pair Corralation between After You and Forth Public

Assuming the 90 days horizon After You Public is expected to generate 0.81 times more return on investment than Forth Public. However, After You Public is 1.24 times less risky than Forth Public. It trades about 0.03 of its potential returns per unit of risk. Forth Public is currently generating about -0.05 per unit of risk. If you would invest  1,090  in After You Public on October 1, 2024 and sell it today you would earn a total of  10.00  from holding After You Public or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

After You Public  vs.  Forth Public

After You Public

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You disclosed solid returns over the last few months and may actually be approaching a breakup point.

Forth Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forth Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with After You and Forth Public

The main advantage of trading using opposite After You and Forth Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if After You position performs unexpectedly, Forth Public 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 Forth Public will offset losses from the drop in Forth Public's long position.

The idea behind After You Public and Forth Public 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.