Correlation Between Forth Smart and After You

Can any of the company-specific risk be diversified away by investing in both Forth Smart and After You 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 After You 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 After You Public, you can compare the effects of market volatilities on Forth Smart and After You 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 After You. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Smart and After You.

Diversification Opportunities for Forth Smart and After You

0.67

Correlation Coefficient

Forth Smart  After You

Poor diversification

The 3 months correlation between Forth and After is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Forth Smart Service and After You Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on After You 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 After You. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of After You Public has no effect on the direction of Forth Smart i.e., Forth Smart and After You go up and down completely randomly.

Pair Corralation between Forth Smart and After You

Assuming the 90 days trading horizon Forth Smart Service is expected to generate 2.49 times more return on investment than After You. However, Forth Smart is 2.49 times more volatile than After You Public. It trades about 0.12 of its potential returns per unit of risk. After You Public is currently generating about 0.1 per unit of risk. If you would invest  610.00  in Forth Smart Service on September 22, 2024 and sell it today you would earn a total of  180.00  from holding Forth Smart Service or generate 29.51% return on investment over 90 days.

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

Forth Smart Service  vs.  After You Public

Forth Smart Service

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Forth Smart Service are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Forth Smart sustained solid returns over the last few months and may actually be approaching a breakup point.

After You Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Forth Smart and After You

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

The idea behind Forth Smart Service and After You 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.