Correlation Between Forian and CareMax

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

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

Diversification Opportunities for Forian and CareMax

-0.31

Correlation Coefficient

Forian  CareMax

Very good diversification

The 3 months correlation between Forian and CareMax is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and Forian 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 Forian Inc are associated (or correlated) with CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of Forian i.e., Forian and CareMax go up and down completely randomly.

Pair Corralation between Forian and CareMax

Given the investment horizon of 90 days Forian Inc is expected to generate 0.18 times more return on investment than CareMax. However, Forian Inc is 5.43 times less risky than CareMax. It trades about 0.02 of its potential returns per unit of risk. CareMax is currently generating about 0.0 per unit of risk. If you would invest  205.00  in Forian Inc on December 29, 2024 and sell it today you would lose (5.00) from holding Forian Inc or give up 2.44% of portfolio value over 90 days.

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

Forian Inc  vs.  CareMax

Forian Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Forian Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Forian may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CareMax

Risk-Adjusted Performance

OK

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

Pair Trading with Forian and CareMax

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

The idea behind Forian Inc and CareMax 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.