Correlation Between Dynatrace Holdings and Forge Global

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

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

Diversification Opportunities for Dynatrace Holdings and Forge Global

-0.35

Correlation Coefficient

Dynatrace Holdings  Forge Global

Very good diversification

The 3 months correlation between Dynatrace and Forge is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dynatrace Holdings LLC and Forge Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forge Global Holdings and Dynatrace Holdings 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 Dynatrace Holdings LLC are associated (or correlated) with Forge Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forge Global Holdings has no effect on the direction of Dynatrace Holdings i.e., Dynatrace Holdings and Forge Global go up and down completely randomly.

Pair Corralation between Dynatrace Holdings and Forge Global

Allowing for the 90-day total investment horizon Dynatrace Holdings LLC is expected to generate 0.3 times more return on investment than Forge Global. However, Dynatrace Holdings LLC is 3.32 times less risky than Forge Global. It trades about 0.12 of its potential returns per unit of risk. Forge Global Holdings is currently generating about -0.05 per unit of risk. If you would invest  4,971  in Dynatrace Holdings LLC on August 31, 2024 and sell it today you would earn a total of  575.00  from holding Dynatrace Holdings LLC or generate 11.57% return on investment over 90 days.

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

Dynatrace Holdings LLC  vs.  Forge Global Holdings

Dynatrace Holdings LLC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynatrace Holdings LLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Dynatrace Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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 abnormal performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Dynatrace Holdings and Forge Global

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

The idea behind Dynatrace Holdings LLC and Forge Global Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.