Correlation Between ForgeRock and Consensus Cloud

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

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

Diversification Opportunities for ForgeRock and Consensus Cloud

0.6

Correlation Coefficient

ForgeRock  Consensus Cloud

Poor diversification

The 3 months correlation between ForgeRock and Consensus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ForgeRock and Consensus Cloud Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consensus Cloud Solutions and ForgeRock 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 ForgeRock are associated (or correlated) with Consensus Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consensus Cloud Solutions has no effect on the direction of ForgeRock i.e., ForgeRock and Consensus Cloud go up and down completely randomly.

Pair Corralation between ForgeRock and Consensus Cloud

If you would invest  2,339  in Consensus Cloud Solutions on September 1, 2024 and sell it today you would earn a total of  156.00  from holding Consensus Cloud Solutions or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

ForgeRock  vs.  Consensus Cloud Solutions

ForgeRock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ForgeRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ForgeRock is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Consensus Cloud Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Consensus Cloud Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Consensus Cloud may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ForgeRock and Consensus Cloud

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

The idea behind ForgeRock and Consensus Cloud Solutions 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.

Check out your portfolio center.

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.