Correlation Between FORWARD AIR and New Residential
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and New Residential 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 FORWARD AIR and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORWARD AIR P and New Residential Investment, you can compare the effects of market volatilities on FORWARD AIR and New Residential 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 FORWARD AIR with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and New Residential.
Diversification Opportunities for FORWARD AIR and New Residential
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORWARD and New is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve and FORWARD AIR 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 FORWARD AIR P are associated (or correlated) with New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and New Residential go up and down completely randomly.
Pair Corralation between FORWARD AIR and New Residential
Assuming the 90 days horizon FORWARD AIR P is expected to generate 2.54 times more return on investment than New Residential. However, FORWARD AIR is 2.54 times more volatile than New Residential Investment. It trades about 0.34 of its potential returns per unit of risk. New Residential Investment is currently generating about 0.37 per unit of risk. 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 |
FORWARD AIR P vs. New Residential Investment
Performance |
| Timeline |
| FORWARD AIR P |
| New Residential Inve |
FORWARD AIR and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and New Residential
The main advantage of trading using opposite FORWARD AIR and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| FORWARD AIR vs. Perdoceo Education | FORWARD AIR vs. Ares Management Corp | FORWARD AIR vs. INVITATION HOMES DL | FORWARD AIR vs. Coor Service Management |
| New Residential vs. Verizon Communications | New Residential vs. MICRONIC MYDATA | New Residential vs. Cass Information Systems | New Residential vs. DATATEC LTD 2 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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