Correlation Between Barnes and Forward Air
Can any of the company-specific risk be diversified away by investing in both Barnes 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 Barnes and Forward Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Forward Air, you can compare the effects of market volatilities on Barnes 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 Barnes with a short position of Forward Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Forward Air.
Diversification Opportunities for Barnes and Forward Air
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnes and Forward is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Forward Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forward Air and Barnes 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 Barnes Group 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 has no effect on the direction of Barnes i.e., Barnes and Forward Air go up and down completely randomly.
Pair Corralation between Barnes and Forward Air
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.64 times more return on investment than Forward Air. However, Barnes Group is 1.57 times less risky than Forward Air. It trades about 0.02 of its potential returns per unit of risk. Forward Air is currently generating about -0.04 per unit of risk. If you would invest 4,317 in Barnes Group on November 1, 2024 and sell it today you would earn a total of 431.00 from holding Barnes Group or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Barnes Group vs. Forward Air
Performance |
| Timeline |
| Barnes Group |
| Forward Air |
Barnes and Forward Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Forward Air
The main advantage of trading using opposite Barnes and Forward Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes 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.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Forward Air vs. Landstar System | Forward Air vs. JB Hunt Transport | Forward Air vs. Expeditors International of | Forward Air vs. CH Robinson Worldwide |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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