Correlation Between Forge Global and Enlivex Therapeutics

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

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

Diversification Opportunities for Forge Global and Enlivex Therapeutics

-0.25

Correlation Coefficient

Forge Global  Enlivex Therapeutics

Very good diversification

The 3 months correlation between Forge and Enlivex is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Forge Global Holdings and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex Therapeutics and Forge Global 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 Forge Global Holdings are associated (or correlated) with Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of Forge Global i.e., Forge Global and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between Forge Global and Enlivex Therapeutics

Given the investment horizon of 90 days Forge Global Holdings is expected to under-perform the Enlivex Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Forge Global Holdings is 1.09 times less risky than Enlivex Therapeutics. The stock trades about -0.03 of its potential returns per unit of risk. The Enlivex Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  123.00  in Enlivex Therapeutics on August 7, 2024 and sell it today you would earn a total of  7.00  from holding Enlivex Therapeutics or generate 5.69% return on investment over 90 days.

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

Forge Global Holdings  vs.  Enlivex Therapeutics

Forge Global Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forge Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Enlivex Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enlivex Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Enlivex Therapeutics may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Forge Global and Enlivex Therapeutics

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

The idea behind Forge Global Holdings and Enlivex Therapeutics 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.