Correlation Between Forbo Holding and Adval Tech

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

By analyzing existing cross correlation between Forbo Holding AG and Adval Tech Holding, you can compare the effects of market volatilities on Forbo Holding and Adval Tech 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 Forbo Holding with a short position of Adval Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forbo Holding and Adval Tech.

Diversification Opportunities for Forbo Holding and Adval Tech

-0.79

Correlation Coefficient

Forbo Holding  Adval Tech

Pay attention - limited upside

The 3 months correlation between Forbo and Adval is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Forbo Holding AG and Adval Tech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adval Tech Holding and Forbo Holding 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 Forbo Holding AG are associated (or correlated) with Adval Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adval Tech Holding has no effect on the direction of Forbo Holding i.e., Forbo Holding and Adval Tech go up and down completely randomly.

Pair Corralation between Forbo Holding and Adval Tech

Assuming the 90 days trading horizon Forbo Holding AG is expected to generate 0.37 times more return on investment than Adval Tech. However, Forbo Holding AG is 2.69 times less risky than Adval Tech. It trades about 0.15 of its potential returns per unit of risk. Adval Tech Holding is currently generating about -0.03 per unit of risk. If you would invest  77,400  in Forbo Holding AG on April 29, 2025 and sell it today you would earn a total of  14,100  from holding Forbo Holding AG or generate 18.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	80.65%
Values	Daily Returns

Forbo Holding AG  vs.  Adval Tech Holding

Forbo Holding AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Forbo Holding AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Forbo Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Adval Tech Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adval Tech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Forbo Holding and Adval Tech

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

The idea behind Forbo Holding AG and Adval Tech Holding 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.