Correlation Between Forbo Holding and Allreal Holding

Can any of the company-specific risk be diversified away by investing in both Forbo Holding and Allreal Holding 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 Allreal Holding 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 Allreal Holding, you can compare the effects of market volatilities on Forbo Holding and Allreal Holding 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 Allreal Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forbo Holding and Allreal Holding.

Diversification Opportunities for Forbo Holding and Allreal Holding

0.12

Correlation Coefficient

Forbo Holding  Allreal Holding

Average diversification

The 3 months correlation between Forbo and Allreal is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Forbo Holding AG and Allreal Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allreal 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 Allreal Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allreal Holding has no effect on the direction of Forbo Holding i.e., Forbo Holding and Allreal Holding go up and down completely randomly.

Pair Corralation between Forbo Holding and Allreal Holding

Assuming the 90 days trading horizon Forbo Holding AG is expected to generate 3.41 times more return on investment than Allreal Holding. However, Forbo Holding is 3.41 times more volatile than Allreal Holding. It trades about 0.0 of its potential returns per unit of risk. Allreal Holding is currently generating about -0.06 per unit of risk. If you would invest  83,500  in Forbo Holding AG on May 27, 2025 and sell it today you would lose (2,200) from holding Forbo Holding AG or give up 2.63% of portfolio value over 90 days.

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

Forbo Holding AG  vs.  Allreal Holding

Forbo Holding AG

Risk-Adjusted Performance

Weakest

Over the last 90 days Forbo Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Forbo Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Allreal Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days Allreal Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Allreal Holding is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Forbo Holding and Allreal Holding

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

The idea behind Forbo Holding AG and Allreal 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.