Correlation Between PUMA SE and Forward Industries
Can any of the company-specific risk be diversified away by investing in both PUMA SE 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 PUMA SE and Forward Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUMA SE and Forward Industries, you can compare the effects of market volatilities on PUMA SE 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 PUMA SE with a short position of Forward Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUMA SE and Forward Industries.
Diversification Opportunities for PUMA SE and Forward Industries
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PUMA and Forward is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PUMA SE and Forward Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forward Industries and PUMA SE 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 PUMA SE 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 PUMA SE i.e., PUMA SE and Forward Industries go up and down completely randomly.
Pair Corralation between PUMA SE and Forward Industries
Assuming the 90 days horizon PUMA SE is expected to under-perform the Forward Industries. But the pink sheet apears to be less risky and, when comparing its historical volatility, PUMA SE is 1.5 times less risky than Forward Industries. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Forward Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Forward Industries on December 2, 2024 and sell it today you would earn a total of 72.00 from holding Forward Industries or generate 17.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PUMA SE vs. Forward Industries
Performance |
Timeline |
PUMA SE |
Forward Industries |
PUMA SE and Forward Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PUMA SE and Forward Industries
The main advantage of trading using opposite PUMA SE and Forward Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUMA SE 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 PUMA SE 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.Forward Industries vs. Crocs Inc | Forward Industries vs. On Holding | Forward Industries vs. Deckers Outdoor | Forward Industries vs. Adidas AG ADR |
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 CEOs Directory module to screen CEOs from public companies around the world.
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