Correlation Between ForgeRock and Informatica

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

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

Diversification Opportunities for ForgeRock and Informatica

0.35

Correlation Coefficient

ForgeRock  Informatica

Weak diversification

The 3 months correlation between ForgeRock and Informatica is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ForgeRock and Informatica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Informatica 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 Informatica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Informatica has no effect on the direction of ForgeRock i.e., ForgeRock and Informatica go up and down completely randomly.

Pair Corralation between ForgeRock and Informatica

If you would invest  2,574  in Informatica on September 20, 2024 and sell it today you would earn a total of  39.00  from holding Informatica or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

ForgeRock  vs.  Informatica

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.

Informatica

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Informatica are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Informatica is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ForgeRock and Informatica

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

The idea behind ForgeRock and Informatica 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.