Correlation Between FORWARD AIR and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS, you can compare the effects of market volatilities on FORWARD AIR and EBRO FOODS 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 EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and EBRO FOODS.
Diversification Opportunities for FORWARD AIR and EBRO FOODS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FORWARD and EBRO is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS 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 EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and EBRO FOODS go up and down completely randomly.
Pair Corralation between FORWARD AIR and EBRO FOODS
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the EBRO FOODS. In addition to that, FORWARD AIR is 3.06 times more volatile than EBRO FOODS. It trades about -0.03 of its total potential returns per unit of risk. EBRO FOODS is currently generating about 0.01 per unit of volatility. If you would invest 1,498 in EBRO FOODS on October 13, 2024 and sell it today you would earn a total of 80.00 from holding EBRO FOODS or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. EBRO FOODS
Performance |
| Timeline |
| FORWARD AIR P |
| EBRO FOODS |
FORWARD AIR and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and EBRO FOODS
The main advantage of trading using opposite FORWARD AIR and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.| FORWARD AIR vs. ADRIATIC METALS LS 013355 | FORWARD AIR vs. Stag Industrial | FORWARD AIR vs. GRIFFIN MINING LTD | FORWARD AIR vs. MICRONIC MYDATA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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