Correlation Between FORWARD AIR and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on FORWARD AIR and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and STORE ELECTRONIC.
Diversification Opportunities for FORWARD AIR and STORE ELECTRONIC
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORWARD and STORE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between FORWARD AIR and STORE ELECTRONIC
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the STORE ELECTRONIC. But the stock apears to be less risky and, when comparing its historical volatility, FORWARD AIR P is 1.11 times less risky than STORE ELECTRONIC. The stock trades about -0.06 of its potential returns per unit of risk. The STORE ELECTRONIC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 13,870 in STORE ELECTRONIC on November 8, 2024 and sell it today you would earn a total of 2,930 from holding STORE ELECTRONIC or generate 21.12% 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. STORE ELECTRONIC
Performance |
| Timeline |
| FORWARD AIR P |
| STORE ELECTRONIC |
FORWARD AIR and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and STORE ELECTRONIC
The main advantage of trading using opposite FORWARD AIR and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| FORWARD AIR vs. ATOSS SOFTWARE | FORWARD AIR vs. Sunny Optical Technology | FORWARD AIR vs. Cleanaway Waste Management | FORWARD AIR vs. ZhongAn Online P |
| STORE ELECTRONIC vs. Molson Coors Beverage | STORE ELECTRONIC vs. BOSTON BEER A | STORE ELECTRONIC vs. Eidesvik Offshore ASA | STORE ELECTRONIC vs. WT OFFSHORE |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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