Correlation Between FORWARD AIR and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and SYSTEMAIR 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 SYSTEMAIR 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 SYSTEMAIR AB, you can compare the effects of market volatilities on FORWARD AIR and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and SYSTEMAIR.
Diversification Opportunities for FORWARD AIR and SYSTEMAIR
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FORWARD and SYSTEMAIR is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and SYSTEMAIR go up and down completely randomly.
Pair Corralation between FORWARD AIR and SYSTEMAIR
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the SYSTEMAIR. In addition to that, FORWARD AIR is 1.47 times more volatile than SYSTEMAIR AB. It trades about -0.03 of its total potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.05 per unit of volatility. If you would invest 429.00 in SYSTEMAIR AB on August 27, 2024 and sell it today you would earn a total of 365.00 from holding SYSTEMAIR AB or generate 85.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FORWARD AIR P vs. SYSTEMAIR AB
Performance |
| Timeline |
| FORWARD AIR P |
| SYSTEMAIR AB |
FORWARD AIR and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and SYSTEMAIR
The main advantage of trading using opposite FORWARD AIR and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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