Correlation Between MidCap Financial and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and FORWARD AIR 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 MidCap Financial and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and FORWARD AIR P, you can compare the effects of market volatilities on MidCap Financial and FORWARD AIR 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 MidCap Financial with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and FORWARD AIR.
Diversification Opportunities for MidCap Financial and FORWARD AIR
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MidCap and FORWARD is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of MidCap Financial i.e., MidCap Financial and FORWARD AIR go up and down completely randomly.
Pair Corralation between MidCap Financial and FORWARD AIR
Assuming the 90 days trading horizon MidCap Financial is expected to generate 46.62 times less return on investment than FORWARD AIR. But when comparing it to its historical volatility, MidCap Financial Investment is 3.18 times less risky than FORWARD AIR. It trades about 0.02 of its potential returns per unit of risk. FORWARD AIR P is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,740 in FORWARD AIR P on October 23, 2024 and sell it today you would earn a total of 520.00 from holding FORWARD AIR P or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. FORWARD AIR P
Performance |
| Timeline |
| MidCap Financial Inv |
| FORWARD AIR P |
MidCap Financial and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and FORWARD AIR
The main advantage of trading using opposite MidCap Financial and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, FORWARD AIR 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 FORWARD AIR will offset losses from the drop in FORWARD AIR's long position.| MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc |
| FORWARD AIR vs. Perdoceo Education | FORWARD AIR vs. Ares Management Corp | FORWARD AIR vs. INVITATION HOMES DL | FORWARD AIR vs. Coor Service Management |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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