Correlation Between Forum Energy and Preformed Line
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Preformed Line 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 Forum Energy and Preformed Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Technologies and Preformed Line Products, you can compare the effects of market volatilities on Forum Energy and Preformed Line 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 Forum Energy with a short position of Preformed Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Preformed Line.
Diversification Opportunities for Forum Energy and Preformed Line
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forum and Preformed is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Preformed Line Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preformed Line Products and Forum Energy 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 Forum Energy Technologies are associated (or correlated) with Preformed Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preformed Line Products has no effect on the direction of Forum Energy i.e., Forum Energy and Preformed Line go up and down completely randomly.
Pair Corralation between Forum Energy and Preformed Line
Considering the 90-day investment horizon Forum Energy Technologies is expected to generate 1.29 times more return on investment than Preformed Line. However, Forum Energy is 1.29 times more volatile than Preformed Line Products. It trades about 0.13 of its potential returns per unit of risk. Preformed Line Products is currently generating about 0.08 per unit of risk. If you would invest 2,352 in Forum Energy Technologies on August 19, 2025 and sell it today you would earn a total of 665.00 from holding Forum Energy Technologies or generate 28.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Preformed Line Products
Performance |
| Timeline |
| Forum Energy Technologies |
| Preformed Line Products |
Forum Energy and Preformed Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Preformed Line
The main advantage of trading using opposite Forum Energy and Preformed Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Preformed Line 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 Preformed Line will offset losses from the drop in Preformed Line's long position.| Forum Energy vs. Trio Petroleum Corp | Forum Energy vs. Sky Quarry | Forum Energy vs. PTL LTD Ordinary | Forum Energy vs. Robin Energy |
| Preformed Line vs. Barrett Business Services | Preformed Line vs. Solid Power | Preformed Line vs. Limbach Holdings | Preformed Line vs. Astec Industries |
Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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