Correlation Between Forstrong Emerging and Forstrong Global

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

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

Diversification Opportunities for Forstrong Emerging and Forstrong Global

0.0

Correlation Coefficient

Forstrong Emerging  Forstrong Global

Pay attention - limited upside

The 3 months correlation between Forstrong and Forstrong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Emerging Markets and Forstrong Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forstrong Global Balanced and Forstrong Emerging 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 Forstrong Emerging Markets 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 Balanced has no effect on the direction of Forstrong Emerging i.e., Forstrong Emerging and Forstrong Global go up and down completely randomly.

Pair Corralation between Forstrong Emerging and Forstrong Global

If you would invest  2,102  in Forstrong Emerging Markets on October 11, 2024 and sell it today you would earn a total of  7,305  from holding Forstrong Emerging Markets or generate 347.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Forstrong Emerging Markets  vs.  Forstrong Global Balanced

Forstrong Emerging

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Forstrong Emerging Markets are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Forstrong Emerging displayed solid returns over the last few months and may actually be approaching a breakup point.

Forstrong Global Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forstrong Global Balanced has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Forstrong Global is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Forstrong Emerging and Forstrong Global

The main advantage of trading using opposite Forstrong Emerging and Forstrong Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Emerging 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 Forstrong Emerging Markets and Forstrong Global Balanced 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.