Correlation Between FORWARD AIR and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum, you can compare the effects of market volatilities on FORWARD AIR and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Occidental Petroleum.
Diversification Opportunities for FORWARD AIR and Occidental Petroleum
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FORWARD and Occidental is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Occidental Petroleum go up and down completely randomly.
Pair Corralation between FORWARD AIR and Occidental Petroleum
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the Occidental Petroleum. In addition to that, FORWARD AIR is 2.77 times more volatile than Occidental Petroleum. It trades about -0.03 of its total potential returns per unit of risk. Occidental Petroleum is currently generating about -0.02 per unit of volatility. If you would invest 5,913 in Occidental Petroleum on November 5, 2024 and sell it today you would lose (1,331) from holding Occidental Petroleum or give up 22.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FORWARD AIR P vs. Occidental Petroleum
Performance |
| Timeline |
| FORWARD AIR P |
| Occidental Petroleum |
FORWARD AIR and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and Occidental Petroleum
The main advantage of trading using opposite FORWARD AIR and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| FORWARD AIR vs. MGIC INVESTMENT | FORWARD AIR vs. Corsair Gaming | FORWARD AIR vs. Altair Engineering | FORWARD AIR vs. RYANAIR HLDGS ADR |
| Occidental Petroleum vs. ZINC MEDIA GR | Occidental Petroleum vs. Fuji Media Holdings | Occidental Petroleum vs. SENECA FOODS A | Occidental Petroleum vs. TOWNSQUARE MEDIA INC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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