Correlation Between Forth Smart and AP Public

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

By analyzing existing cross correlation between Forth Smart Service and AP Public, you can compare the effects of market volatilities on Forth Smart and AP Public 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 Forth Smart with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Smart and AP Public.

Diversification Opportunities for Forth Smart and AP Public

-0.38

Correlation Coefficient

Forth Smart  AP Public

Very good diversification

The 3 months correlation between Forth and AP Public is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Forth Smart Service and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Forth Smart 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 Forth Smart Service are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Forth Smart i.e., Forth Smart and AP Public go up and down completely randomly.

Pair Corralation between Forth Smart and AP Public

Assuming the 90 days trading horizon Forth Smart Service is expected to under-perform the AP Public. In addition to that, Forth Smart is 1.56 times more volatile than AP Public. It trades about -0.15 of its total potential returns per unit of risk. AP Public is currently generating about 0.04 per unit of volatility. If you would invest  830.00  in AP Public on December 31, 2024 and sell it today you would earn a total of  30.00  from holding AP Public or generate 3.61% return on investment over 90 days.

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

Forth Smart Service  vs.  AP Public

Forth Smart Service

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forth Smart Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AP Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, AP Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Forth Smart and AP Public

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

The idea behind Forth Smart Service and AP Public 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..