Correlation Between Nutex Health and Forian

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

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

Diversification Opportunities for Nutex Health and Forian

-0.25

Correlation Coefficient

Nutex Health  Forian

Very good diversification

The 3 months correlation between Nutex and Forian is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nutex Health and Forian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forian Inc and Nutex Health 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 Nutex Health are associated (or correlated) with Forian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forian Inc has no effect on the direction of Nutex Health i.e., Nutex Health and Forian go up and down completely randomly.

Pair Corralation between Nutex Health and Forian

Given the investment horizon of 90 days Nutex Health is expected to generate 3.59 times more return on investment than Forian. However, Nutex Health is 3.59 times more volatile than Forian Inc. It trades about 0.13 of its potential returns per unit of risk. Forian Inc is currently generating about 0.0 per unit of risk. If you would invest  2,482  in Nutex Health on October 22, 2024 and sell it today you would earn a total of  1,299  from holding Nutex Health or generate 52.34% return on investment over 90 days.

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

Nutex Health  vs.  Forian Inc

Nutex Health

Risk-Adjusted Performance

10 of 100

OK

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

Forian Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forian Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Forian is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nutex Health and Forian

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

The idea behind Nutex Health and Forian Inc 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.