Correlation Between Cogstate and Forian

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

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

Diversification Opportunities for Cogstate and Forian

-0.25

Correlation Coefficient

Cogstate  Forian

Very good diversification

The 3 months correlation between Cogstate and Forian is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cogstate Limited and Forian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forian Inc and Cogstate 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 Cogstate Limited are associated (or correlated) with Forian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forian Inc has no effect on the direction of Cogstate i.e., Cogstate and Forian go up and down completely randomly.

Pair Corralation between Cogstate and Forian

Assuming the 90 days horizon Cogstate Limited is expected to generate 2.19 times more return on investment than Forian. However, Cogstate is 2.19 times more volatile than Forian Inc. It trades about 0.14 of its potential returns per unit of risk. Forian Inc is currently generating about -0.02 per unit of risk. If you would invest  64.00  in Cogstate Limited on October 22, 2024 and sell it today you would earn a total of  4.00  from holding Cogstate Limited or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Cogstate Limited  vs.  Forian Inc

Cogstate Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Forian Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forian Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Forian is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cogstate and Forian

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

The idea behind Cogstate Limited and Forian Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.