Correlation Between Forward Industries and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Forward Industries and Advanced Micro 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 Forward Industries and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forward Industries and Advanced Micro Devices, you can compare the effects of market volatilities on Forward Industries and Advanced Micro 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 Forward Industries with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forward Industries and Advanced Micro.
Diversification Opportunities for Forward Industries and Advanced Micro
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Forward and Advanced is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Forward Industries and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and Forward Industries 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 Forward Industries are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Forward Industries i.e., Forward Industries and Advanced Micro go up and down completely randomly.
Pair Corralation between Forward Industries and Advanced Micro
Given the investment horizon of 90 days Forward Industries is expected to generate 1.14 times more return on investment than Advanced Micro. However, Forward Industries is 1.14 times more volatile than Advanced Micro Devices. It trades about -0.13 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.32 per unit of risk. If you would invest 59.00 in Forward Industries on January 17, 2024 and sell it today you would lose (5.00) from holding Forward Industries or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forward Industries vs. Advanced Micro Devices
Performance |
| Timeline |
| Forward Industries |
| Advanced Micro Devices |
Forward Industries and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forward Industries and Advanced Micro
The main advantage of trading using opposite Forward Industries and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forward Industries position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Forward Industries vs. Signet Jewelers | Forward Industries vs. TheRealReal | Forward Industries vs. Envela Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |