Correlation Between FORWARD AIR and INTER CARS
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and INTER CARS 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 INTER CARS 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 INTER CARS SA, you can compare the effects of market volatilities on FORWARD AIR and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and INTER CARS.
Diversification Opportunities for FORWARD AIR and INTER CARS
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORWARD and INTER is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and INTER CARS go up and down completely randomly.
Pair Corralation between FORWARD AIR and INTER CARS
Assuming the 90 days horizon FORWARD AIR P is expected to generate 3.87 times more return on investment than INTER CARS. However, FORWARD AIR is 3.87 times more volatile than INTER CARS SA. It trades about 0.02 of its potential returns per unit of risk. INTER CARS SA is currently generating about -0.05 per unit of risk. If you would invest 3,380 in FORWARD AIR P on August 29, 2024 and sell it today you would lose (20.00) from holding FORWARD AIR P or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. INTER CARS SA
Performance |
| Timeline |
| FORWARD AIR P |
| INTER CARS SA |
FORWARD AIR and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and INTER CARS
The main advantage of trading using opposite FORWARD AIR and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
| INTER CARS vs. PT Astra International | INTER CARS vs. Continental Aktiengesellschaft | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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