Correlation Between Clear Blue and Forstrong Global

Can any of the company-specific risk be diversified away by investing in both Clear Blue and Forstrong Global 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 Clear Blue and Forstrong Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clear Blue Technologies and Forstrong Global Income, you can compare the effects of market volatilities on Clear Blue and Forstrong Global 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 Clear Blue with a short position of Forstrong Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Blue and Forstrong Global.

Diversification Opportunities for Clear Blue and Forstrong Global

-0.34

Correlation Coefficient

Clear Blue  Forstrong Global

Very good diversification

The 3 months correlation between Clear and Forstrong is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Clear Blue Technologies and Forstrong Global Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forstrong Global Income and Clear Blue 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 Clear Blue Technologies are associated (or correlated) with Forstrong Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forstrong Global Income has no effect on the direction of Clear Blue i.e., Clear Blue and Forstrong Global go up and down completely randomly.

Pair Corralation between Clear Blue and Forstrong Global

Assuming the 90 days trading horizon Clear Blue Technologies is expected to generate 28.32 times more return on investment than Forstrong Global. However, Clear Blue is 28.32 times more volatile than Forstrong Global Income. It trades about 0.05 of its potential returns per unit of risk. Forstrong Global Income is currently generating about -0.23 per unit of risk. If you would invest  2.00  in Clear Blue Technologies on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Clear Blue Technologies or generate 0.0% return on investment over 90 days.

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

Clear Blue Technologies  vs.  Forstrong Global Income

Clear Blue Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Blue Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Forstrong Global Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forstrong Global Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Forstrong Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Clear Blue and Forstrong Global

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

The idea behind Clear Blue Technologies and Forstrong Global Income 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.