Correlation Between Forth Smart and Comanche International

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

Diversification Opportunities for Forth Smart and Comanche International

-0.78

Correlation Coefficient

Forth Smart  Comanche International

Pay attention - limited upside

The 3 months correlation between Forth and Comanche is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Forth Smart Service and Comanche International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comanche International 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 Comanche International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comanche International has no effect on the direction of Forth Smart i.e., Forth Smart and Comanche International go up and down completely randomly.

Pair Corralation between Forth Smart and Comanche International

Assuming the 90 days trading horizon Forth Smart Service is expected to generate 0.34 times more return on investment than Comanche International. However, Forth Smart Service is 2.93 times less risky than Comanche International. It trades about 0.12 of its potential returns per unit of risk. Comanche International Public is currently generating about -0.08 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Forth Smart Service  vs.  Comanche International 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 weak primary indicators, Forth Smart sustained solid returns over the last few months and may actually be approaching a breakup point.

Comanche International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comanche International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Forth Smart and Comanche International

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

The idea behind Forth Smart Service and Comanche International 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.