Correlation Between Workpoint Entertainment and Forth Public

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

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

Diversification Opportunities for Workpoint Entertainment and Forth Public

0.93

Correlation Coefficient

Workpoint Entertainment  Forth Public

Almost no diversification

The 3 months correlation between Workpoint and Forth is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Workpoint Entertainment Public and Forth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forth Public and Workpoint Entertainment 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 Workpoint Entertainment Public are associated (or correlated) with Forth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forth Public has no effect on the direction of Workpoint Entertainment i.e., Workpoint Entertainment and Forth Public go up and down completely randomly.

Pair Corralation between Workpoint Entertainment and Forth Public

Assuming the 90 days trading horizon Workpoint Entertainment Public is expected to under-perform the Forth Public. But the stock apears to be less risky and, when comparing its historical volatility, Workpoint Entertainment Public is 1.48 times less risky than Forth Public. The stock trades about -0.64 of its potential returns per unit of risk. The Forth Public is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  1,140  in Forth Public on October 4, 2024 and sell it today you would lose (80.00) from holding Forth Public or give up 7.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Workpoint Entertainment Public  vs.  Forth Public

Workpoint Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workpoint Entertainment Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Forth Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forth 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Workpoint Entertainment and Forth Public

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

The idea behind Workpoint Entertainment Public and Forth 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.