Correlation Between R1 RCM and Forian

Can any of the company-specific risk be diversified away by investing in both R1 RCM and Forian 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 R1 RCM and Forian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between R1 RCM Inc and Forian Inc, you can compare the effects of market volatilities on R1 RCM and Forian 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 R1 RCM with a short position of Forian. Check out your portfolio center. Please also check ongoing floating volatility patterns of R1 RCM and Forian.

Diversification Opportunities for R1 RCM and Forian

-0.86

Correlation Coefficient

R1 RCM  Forian

Pay attention - limited upside

The 3 months correlation between RCM and Forian is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding R1 RCM Inc and Forian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forian Inc and R1 RCM 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 R1 RCM Inc are associated (or correlated) with Forian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forian Inc has no effect on the direction of R1 RCM i.e., R1 RCM and Forian go up and down completely randomly.

Pair Corralation between R1 RCM and Forian

Considering the 90-day investment horizon R1 RCM Inc is expected to generate 0.01 times more return on investment than Forian. However, R1 RCM Inc is 72.05 times less risky than Forian. It trades about 0.72 of its potential returns per unit of risk. Forian Inc is currently generating about -0.05 per unit of risk. If you would invest  1,427  in R1 RCM Inc on September 6, 2024 and sell it today you would earn a total of  4.00  from holding R1 RCM Inc or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	50.0%
Values	Daily Returns

R1 RCM Inc  vs.  Forian Inc

R1 RCM Inc

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days R1 RCM Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, R1 RCM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Forian Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forian Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with R1 RCM and Forian

The main advantage of trading using opposite R1 RCM and Forian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if R1 RCM position performs unexpectedly, Forian 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 Forian will offset losses from the drop in Forian's long position.

The idea behind R1 RCM Inc and Forian Inc 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.