Correlation Between FORWARD AIR and Cal Maine
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Cal Maine 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 Cal Maine 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 Cal Maine Foods, you can compare the effects of market volatilities on FORWARD AIR and Cal Maine 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 Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Cal Maine.
Diversification Opportunities for FORWARD AIR and Cal Maine
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FORWARD and Cal is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine 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 Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Cal Maine go up and down completely randomly.
Pair Corralation between FORWARD AIR and Cal Maine
Assuming the 90 days horizon FORWARD AIR is expected to generate 2.91 times less return on investment than Cal Maine. In addition to that, FORWARD AIR is 1.92 times more volatile than Cal Maine Foods. It trades about 0.05 of its total potential returns per unit of risk. Cal Maine Foods is currently generating about 0.3 per unit of volatility. If you would invest 6,540 in Cal Maine Foods on August 29, 2024 and sell it today you would earn a total of 2,592 from holding Cal Maine Foods or generate 39.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
FORWARD AIR P vs. Cal Maine Foods
Performance |
| Timeline |
| FORWARD AIR P |
| Cal Maine Foods |
FORWARD AIR and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and Cal Maine
The main advantage of trading using opposite FORWARD AIR and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Cal Maine 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 Cal Maine will offset losses from the drop in Cal Maine's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
| Cal Maine vs. FORWARD AIR P | Cal Maine vs. Fair Isaac Corp | Cal Maine vs. MI Homes | Cal Maine vs. ANGI Homeservices |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |