Correlation Between FormPipe Software and Gentoo Media

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

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

Diversification Opportunities for FormPipe Software and Gentoo Media

-0.48

Correlation Coefficient

FormPipe Software  Gentoo Media

Very good diversification

The 3 months correlation between FormPipe and Gentoo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Gentoo Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentoo Media and FormPipe Software 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 FormPipe Software AB are associated (or correlated) with Gentoo Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentoo Media has no effect on the direction of FormPipe Software i.e., FormPipe Software and Gentoo Media go up and down completely randomly.

Pair Corralation between FormPipe Software and Gentoo Media

Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 0.39 times more return on investment than Gentoo Media. However, FormPipe Software AB is 2.58 times less risky than Gentoo Media. It trades about 0.09 of its potential returns per unit of risk. Gentoo Media is currently generating about -0.11 per unit of risk. If you would invest  2,624  in FormPipe Software AB on April 22, 2025 and sell it today you would earn a total of  226.00  from holding FormPipe Software AB or generate 8.61% return on investment over 90 days.

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

FormPipe Software AB  vs.  Gentoo Media

FormPipe Software

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FormPipe Software AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FormPipe Software may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Gentoo Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gentoo Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FormPipe Software and Gentoo Media

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

The idea behind FormPipe Software AB and Gentoo Media 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.