Correlation Between Perfect Moment and Forward Industries

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

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

Diversification Opportunities for Perfect Moment and Forward Industries

-0.6

Correlation Coefficient

Perfect Moment  Forward Industries

Excellent diversification

The 3 months correlation between Perfect and Forward is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Perfect Moment and Forward Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forward Industries and Perfect Moment 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 Perfect Moment are associated (or correlated) with Forward Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forward Industries has no effect on the direction of Perfect Moment i.e., Perfect Moment and Forward Industries go up and down completely randomly.

Pair Corralation between Perfect Moment and Forward Industries

Given the investment horizon of 90 days Perfect Moment is expected to generate 1.84 times more return on investment than Forward Industries. However, Perfect Moment is 1.84 times more volatile than Forward Industries. It trades about 0.08 of its potential returns per unit of risk. Forward Industries is currently generating about -0.06 per unit of risk. If you would invest  97.00  in Perfect Moment on December 29, 2024 and sell it today you would earn a total of  19.00  from holding Perfect Moment or generate 19.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Perfect Moment  vs.  Forward Industries

Perfect Moment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perfect Moment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Perfect Moment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Forward Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forward Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Perfect Moment and Forward Industries

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

The idea behind Perfect Moment and Forward Industries 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.