Correlation Between Forrester Research and Maximus

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

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

Diversification Opportunities for Forrester Research and Maximus

0.24

Correlation Coefficient

Forrester Research  Maximus

Modest diversification

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

Pair Corralation between Forrester Research and Maximus

Given the investment horizon of 90 days Forrester Research is expected to generate 2.48 times more return on investment than Maximus. However, Forrester Research is 2.48 times more volatile than Maximus. It trades about 0.13 of its potential returns per unit of risk. Maximus is currently generating about -0.01 per unit of risk. If you would invest  1,601  in Forrester Research on August 15, 2024 and sell it today you would earn a total of  108.00  from holding Forrester Research or generate 6.75% return on investment over 90 days.

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

Forrester Research  vs.  Maximus

Forrester Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forrester Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Maximus

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Maximus are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Maximus is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Forrester Research and Maximus

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

The idea behind Forrester Research and Maximus 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.