Correlation Between FORWARD AIR and Western Copper
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on FORWARD AIR and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Western Copper.
Diversification Opportunities for FORWARD AIR and Western Copper
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FORWARD and Western is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Western Copper go up and down completely randomly.
Pair Corralation between FORWARD AIR and Western Copper
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the Western Copper. In addition to that, FORWARD AIR is 1.48 times more volatile than Western Copper and. It trades about -0.04 of its total potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of volatility. If you would invest 176.00 in Western Copper and on November 27, 2024 and sell it today you would lose (78.00) from holding Western Copper and or give up 44.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. Western Copper and
Performance |
| Timeline |
| FORWARD AIR P |
| Western Copper |
FORWARD AIR and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and Western Copper
The main advantage of trading using opposite FORWARD AIR and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
| Western Copper vs. Stag Industrial | Western Copper vs. GOLDQUEST MINING | Western Copper vs. Fukuyama Transporting Co | Western Copper vs. Air Transport Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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