Correlation Between FORWARD AIR and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on FORWARD AIR and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and BRIT AMER.
Diversification Opportunities for FORWARD AIR and BRIT AMER
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORWARD and BRIT is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and BRIT AMER go up and down completely randomly.
Pair Corralation between FORWARD AIR and BRIT AMER
Assuming the 90 days horizon FORWARD AIR P is expected to generate 5.47 times more return on investment than BRIT AMER. However, FORWARD AIR is 5.47 times more volatile than BRIT AMER TOBACCO. It trades about 0.09 of its potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.17 per unit of risk. If you would invest 1,920 in FORWARD AIR P on September 3, 2024 and sell it today you would earn a total of 1,440 from holding FORWARD AIR P or generate 75.0% 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. BRIT AMER TOBACCO
Performance |
| Timeline |
| FORWARD AIR P |
| BRIT AMER TOBACCO |
FORWARD AIR and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and BRIT AMER
The main advantage of trading using opposite FORWARD AIR and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
| BRIT AMER vs. FEMALE HEALTH | BRIT AMER vs. PARKEN Sport Entertainment | BRIT AMER vs. Amkor Technology | BRIT AMER vs. CVS Health |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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