Correlation Between FORWARD AIR and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and MidCap Financial 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 MidCap Financial 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 MidCap Financial Investment, you can compare the effects of market volatilities on FORWARD AIR and MidCap Financial 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 MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and MidCap Financial.
Diversification Opportunities for FORWARD AIR and MidCap Financial
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between FORWARD and MidCap is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv 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 MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and MidCap Financial go up and down completely randomly.
Pair Corralation between FORWARD AIR and MidCap Financial
Assuming the 90 days horizon FORWARD AIR P is expected to generate 2.32 times more return on investment than MidCap Financial. However, FORWARD AIR is 2.32 times more volatile than MidCap Financial Investment. It trades about 0.07 of its potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.11 per unit of risk. If you would invest 3,080 in FORWARD AIR P on November 3, 2024 and sell it today you would earn a total of 100.00 from holding FORWARD AIR P or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FORWARD AIR P vs. MidCap Financial Investment
Performance |
| Timeline |
| FORWARD AIR P |
| MidCap Financial Inv |
FORWARD AIR and MidCap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and MidCap Financial
The main advantage of trading using opposite FORWARD AIR and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.| FORWARD AIR vs. CN DATANG C | FORWARD AIR vs. Linedata Services SA | FORWARD AIR vs. Northern Data AG | FORWARD AIR vs. DATAGROUP SE |
| MidCap Financial vs. SIVERS SEMICONDUCTORS AB | MidCap Financial vs. NorAm Drilling AS | MidCap Financial vs. Volkswagen AG | MidCap Financial vs. Darden Restaurants |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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