Correlation Between Forge Global and Roadzen

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

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

Diversification Opportunities for Forge Global and Roadzen

-0.48

Correlation Coefficient

Forge Global  Roadzen

Very good diversification

The 3 months correlation between Forge and Roadzen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Forge Global Holdings and Roadzen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadzen and Forge Global 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 Forge Global Holdings are associated (or correlated) with Roadzen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadzen has no effect on the direction of Forge Global i.e., Forge Global and Roadzen go up and down completely randomly.

Pair Corralation between Forge Global and Roadzen

Given the investment horizon of 90 days Forge Global Holdings is expected to under-perform the Roadzen. But the stock apears to be less risky and, when comparing its historical volatility, Forge Global Holdings is 2.2 times less risky than Roadzen. The stock trades about -0.1 of its potential returns per unit of risk. The Roadzen is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  89.00  in Roadzen on October 23, 2024 and sell it today you would earn a total of  63.00  from holding Roadzen or generate 70.79% return on investment over 90 days.

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

Forge Global Holdings  vs.  Roadzen

Forge Global Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forge Global Holdings 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Roadzen

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roadzen are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Roadzen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forge Global and Roadzen

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

The idea behind Forge Global Holdings and Roadzen 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.