Correlation Between Forian and So Young

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

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

Diversification Opportunities for Forian and So Young

0.37

Correlation Coefficient

Forian  So Young

Weak diversification

The 3 months correlation between Forian and So Young is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and So Young International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Young International 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 So Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Young International has no effect on the direction of Forian i.e., Forian and So Young go up and down completely randomly.

Pair Corralation between Forian and So Young

Given the investment horizon of 90 days Forian is expected to generate 1.98 times less return on investment than So Young. In addition to that, Forian is 1.55 times more volatile than So Young International. It trades about 0.02 of its total potential returns per unit of risk. So Young International is currently generating about 0.06 per unit of volatility. If you would invest  78.00  in So Young International on December 29, 2024 and sell it today you would earn a total of  8.00  from holding So Young International or generate 10.26% return on investment over 90 days.

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

Forian Inc  vs.  So Young International

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.

So Young International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in So Young International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, So Young showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forian and So Young

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

The idea behind Forian Inc and So Young International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.