Correlation Between FORWARD AIR and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on FORWARD AIR and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Compagnie Plastic.
Diversification Opportunities for FORWARD AIR and Compagnie Plastic
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORWARD and Compagnie is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Compagnie Plastic go up and down completely randomly.
Pair Corralation between FORWARD AIR and Compagnie Plastic
Assuming the 90 days horizon FORWARD AIR is expected to generate 1.68 times less return on investment than Compagnie Plastic. In addition to that, FORWARD AIR is 1.09 times more volatile than Compagnie Plastic Omnium. It trades about 0.09 of its total potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.16 per unit of volatility. If you would invest 999.00 in Compagnie Plastic Omnium on November 1, 2024 and sell it today you would earn a total of 72.00 from holding Compagnie Plastic Omnium or generate 7.21% 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. Compagnie Plastic Omnium
Performance |
| Timeline |
| FORWARD AIR P |
| Compagnie Plastic Omnium |
FORWARD AIR and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and Compagnie Plastic
The main advantage of trading using opposite FORWARD AIR and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| FORWARD AIR vs. Uber Technologies | FORWARD AIR vs. GAZTRTECHNIUADR15EO01 | FORWARD AIR vs. Playtech plc | FORWARD AIR vs. De Grey Mining |
| Compagnie Plastic vs. CARDINAL HEALTH | Compagnie Plastic vs. HEALTHSTREAM | Compagnie Plastic vs. EIDESVIK OFFSHORE NK | Compagnie Plastic vs. PURETECH HEALTH PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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