Correlation Between Exponent and Forrester Research

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

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

Diversification Opportunities for Exponent and Forrester Research

0.92

Correlation Coefficient

Exponent  Forrester Research

Almost no diversification

The 3 months correlation between Exponent and Forrester is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Forrester Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forrester Research and Exponent 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 Exponent are associated (or correlated) with Forrester Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forrester Research has no effect on the direction of Exponent i.e., Exponent and Forrester Research go up and down completely randomly.

Pair Corralation between Exponent and Forrester Research

Given the investment horizon of 90 days Exponent is expected to generate 0.45 times more return on investment than Forrester Research. However, Exponent is 2.21 times less risky than Forrester Research. It trades about -0.09 of its potential returns per unit of risk. Forrester Research is currently generating about -0.26 per unit of risk. If you would invest  8,862  in Exponent on December 30, 2024 and sell it today you would lose (639.00) from holding Exponent or give up 7.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Exponent  vs.  Forrester Research

Exponent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Forrester Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forrester Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Exponent and Forrester Research

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

The idea behind Exponent and Forrester Research 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.