Correlation Between FORWARD AIR and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and LAir Liquide 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 LAir Liquide 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 LAir Liquide SA, you can compare the effects of market volatilities on FORWARD AIR and LAir Liquide 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 LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and LAir Liquide.
Diversification Opportunities for FORWARD AIR and LAir Liquide
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between FORWARD and LAir is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and LAir Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide 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 LAir Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAir Liquide SA has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and LAir Liquide go up and down completely randomly.
Pair Corralation between FORWARD AIR and LAir Liquide
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the LAir Liquide. In addition to that, FORWARD AIR is 3.21 times more volatile than LAir Liquide SA. It trades about -0.06 of its total potential returns per unit of risk. LAir Liquide SA is currently generating about 0.04 per unit of volatility. If you would invest 15,886 in LAir Liquide SA on September 13, 2024 and sell it today you would earn a total of 92.00 from holding LAir Liquide SA or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. LAir Liquide SA
Performance |
| Timeline |
| FORWARD AIR P |
| LAir Liquide SA |
FORWARD AIR and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and LAir Liquide
The main advantage of trading using opposite FORWARD AIR and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, LAir Liquide 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 LAir Liquide will offset losses from the drop in LAir Liquide's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
| LAir Liquide vs. Apple Inc | LAir Liquide vs. Apple Inc | LAir Liquide vs. Apple Inc | LAir Liquide 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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