Correlation Between Forian and SPAR

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

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

Diversification Opportunities for Forian and SPAR

-0.24

Correlation Coefficient

Forian  SPAR

Very good diversification

The 3 months correlation between Forian and SPAR is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and Forian 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 Forian Inc are associated (or correlated) with SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of Forian i.e., Forian and SPAR go up and down completely randomly.

Pair Corralation between Forian and SPAR

Given the investment horizon of 90 days Forian Inc is expected to under-perform the SPAR. But the stock apears to be less risky and, when comparing its historical volatility, Forian Inc is 1.15 times less risky than SPAR. The stock trades about -0.06 of its potential returns per unit of risk. The SPAR Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  112.00  in SPAR Group on May 16, 2025 and sell it today you would earn a total of  2.00  from holding SPAR Group or generate 1.79% return on investment over 90 days.

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

Forian Inc  vs.  SPAR Group

Forian Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Forian Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SPAR Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPAR Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, SPAR is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Forian and SPAR

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

The idea behind Forian Inc and SPAR Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.