Correlation Between FORWARD AIR and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on FORWARD AIR and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and USWE SPORTS.
Diversification Opportunities for FORWARD AIR and USWE SPORTS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FORWARD and USWE is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and USWE SPORTS go up and down completely randomly.
Pair Corralation between FORWARD AIR and USWE SPORTS
Assuming the 90 days horizon FORWARD AIR P is expected to generate 3.23 times more return on investment than USWE SPORTS. However, FORWARD AIR is 3.23 times more volatile than USWE SPORTS AB. It trades about 0.09 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.13 per unit of risk. If you would invest 3,100 in FORWARD AIR P on September 5, 2024 and sell it today you would earn a total of 300.00 from holding FORWARD AIR P or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
FORWARD AIR P vs. USWE SPORTS AB
Performance |
| Timeline |
| FORWARD AIR P |
| USWE SPORTS AB |
FORWARD AIR and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and USWE SPORTS
The main advantage of trading using opposite FORWARD AIR and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| FORWARD AIR vs. USWE SPORTS AB | FORWARD AIR vs. National Health Investors | FORWARD AIR vs. Bumrungrad Hospital Public | FORWARD AIR vs. Cardinal Health |
| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. SHIMANO INC UNSPADR10 | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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