Correlation Between Forza Land and Fortune Mate

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

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

Diversification Opportunities for Forza Land and Fortune Mate

0.0

Correlation Coefficient

Forza Land  Fortune Mate

Pay attention - limited upside

The 3 months correlation between Forza and Fortune is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Forza Land Indonesia and Fortune Mate Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Mate Indonesia and Forza Land 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 Forza Land Indonesia are associated (or correlated) with Fortune Mate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Mate Indonesia has no effect on the direction of Forza Land i.e., Forza Land and Fortune Mate go up and down completely randomly.

Pair Corralation between Forza Land and Fortune Mate

If you would invest  24,000  in Fortune Mate Indonesia on October 24, 2024 and sell it today you would earn a total of  30,500  from holding Fortune Mate Indonesia or generate 127.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Forza Land Indonesia  vs.  Fortune Mate Indonesia

Forza Land Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forza Land Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Forza Land is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Fortune Mate Indonesia

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Mate Indonesia are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Fortune Mate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forza Land and Fortune Mate

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

The idea behind Forza Land Indonesia and Fortune Mate Indonesia 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.