Correlation Between Forth Smart and Ekachai Medical

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

Diversification Opportunities for Forth Smart and Ekachai Medical

-0.62

Correlation Coefficient

Forth Smart  Ekachai Medical

Excellent diversification

The 3 months correlation between Forth and Ekachai is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Forth Smart Service and Ekachai Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekachai Medical Care 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 Ekachai Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekachai Medical Care has no effect on the direction of Forth Smart i.e., Forth Smart and Ekachai Medical go up and down completely randomly.

Pair Corralation between Forth Smart and Ekachai Medical

Assuming the 90 days trading horizon Forth Smart Service is expected to generate 3.51 times more return on investment than Ekachai Medical. However, Forth Smart is 3.51 times more volatile than Ekachai Medical Care. It trades about 0.14 of its potential returns per unit of risk. Ekachai Medical Care is currently generating about -0.03 per unit of risk. If you would invest  575.00  in Forth Smart Service on October 12, 2024 and sell it today you would earn a total of  215.00  from holding Forth Smart Service or generate 37.39% 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.  Ekachai Medical Care

Forth Smart Service

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Forth Smart Service are ranked lower than 11 (%) 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.

Ekachai Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekachai Medical Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Ekachai Medical 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 Ekachai Medical

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

The idea behind Forth Smart Service and Ekachai Medical Care 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.