Correlation Between Forwardly and Sun Pacific

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

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

Diversification Opportunities for Forwardly and Sun Pacific

0.63

Correlation Coefficient

Forwardly  Sun Pacific

Poor diversification

The 3 months correlation between Forwardly and Sun is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Forwardly and Sun Pacific Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Pacific Holding and Forwardly 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 Forwardly are associated (or correlated) with Sun Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Pacific Holding has no effect on the direction of Forwardly i.e., Forwardly and Sun Pacific go up and down completely randomly.

Pair Corralation between Forwardly and Sun Pacific

Given the investment horizon of 90 days Forwardly is expected to generate 1.4 times more return on investment than Sun Pacific. However, Forwardly is 1.4 times more volatile than Sun Pacific Holding. It trades about -0.06 of its potential returns per unit of risk. Sun Pacific Holding is currently generating about -0.18 per unit of risk. If you would invest  0.95  in Forwardly on December 28, 2024 and sell it today you would lose (0.31) from holding Forwardly or give up 32.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Forwardly  vs.  Sun Pacific Holding

Forwardly

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forwardly has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sun Pacific Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Pacific Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Forwardly and Sun Pacific

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

The idea behind Forwardly and Sun Pacific Holding 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.