Correlation Between Forian and STRATA Skin

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

By analyzing existing cross correlation between Forian Inc and STRATA Skin Sciences, you can compare the effects of market volatilities on Forian and STRATA Skin 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 STRATA Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forian and STRATA Skin.

Diversification Opportunities for Forian and STRATA Skin

0.54

Correlation Coefficient

Forian  STRATA Skin

Very weak diversification

The 3 months correlation between Forian and STRATA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and STRATA Skin Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATA Skin Sciences 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 STRATA Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATA Skin Sciences has no effect on the direction of Forian i.e., Forian and STRATA Skin go up and down completely randomly.

Pair Corralation between Forian and STRATA Skin

Given the investment horizon of 90 days Forian Inc is expected to generate 0.76 times more return on investment than STRATA Skin. However, Forian Inc is 1.32 times less risky than STRATA Skin. It trades about -0.05 of its potential returns per unit of risk. STRATA Skin Sciences is currently generating about -0.14 per unit of risk. If you would invest  215.00  in Forian Inc on May 16, 2025 and sell it today you would lose (22.00) from holding Forian Inc or give up 10.23% of portfolio value over 90 days.

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

Forian Inc  vs.  STRATA Skin Sciences

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.

STRATA Skin Sciences

Risk-Adjusted Performance

Weakest

Over the last 90 days STRATA Skin Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Forian and STRATA Skin

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

The idea behind Forian Inc and STRATA Skin Sciences 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.