Correlation Between FORWARD AIR and LION ONE
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and LION ONE 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 LION ONE 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 LION ONE METALS, you can compare the effects of market volatilities on FORWARD AIR and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and LION ONE.
Diversification Opportunities for FORWARD AIR and LION ONE
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FORWARD and LION is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and LION ONE go up and down completely randomly.
Pair Corralation between FORWARD AIR and LION ONE
Assuming the 90 days horizon FORWARD AIR P is expected to generate 1.23 times more return on investment than LION ONE. However, FORWARD AIR is 1.23 times more volatile than LION ONE METALS. It trades about -0.01 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.07 per unit of risk. If you would invest 6,028 in FORWARD AIR P on September 1, 2024 and sell it today you would lose (2,668) from holding FORWARD AIR P or give up 44.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. LION ONE METALS
Performance |
| Timeline |
| FORWARD AIR P |
| LION ONE METALS |
FORWARD AIR and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and LION ONE
The main advantage of trading using opposite FORWARD AIR and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
| LION ONE vs. Corporate Office Properties | LION ONE vs. Eagle Materials | LION ONE vs. Plastic Omnium | LION ONE vs. KENEDIX OFFICE INV |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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