Correlation Between FORWARD AIR and SINGAPORE POST
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and SINGAPORE POST 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 SINGAPORE POST 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 SINGAPORE POST, you can compare the effects of market volatilities on FORWARD AIR and SINGAPORE POST 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 SINGAPORE POST. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and SINGAPORE POST.
Diversification Opportunities for FORWARD AIR and SINGAPORE POST
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FORWARD and SINGAPORE is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and SINGAPORE POST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE POST 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 SINGAPORE POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE POST has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and SINGAPORE POST go up and down completely randomly.
Pair Corralation between FORWARD AIR and SINGAPORE POST
Assuming the 90 days horizon FORWARD AIR P is expected to generate 1.96 times more return on investment than SINGAPORE POST. However, FORWARD AIR is 1.96 times more volatile than SINGAPORE POST. It trades about 0.15 of its potential returns per unit of risk. SINGAPORE POST is currently generating about 0.08 per unit of risk. If you would invest 1,510 in FORWARD AIR P on August 30, 2024 and sell it today you would earn a total of 1,870 from holding FORWARD AIR P or generate 123.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. SINGAPORE POST
Performance |
| Timeline |
| FORWARD AIR P |
| SINGAPORE POST |
FORWARD AIR and SINGAPORE POST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and SINGAPORE POST
The main advantage of trading using opposite FORWARD AIR and SINGAPORE POST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, SINGAPORE POST 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 SINGAPORE POST will offset losses from the drop in SINGAPORE POST's long position.| FORWARD AIR vs. Meiko Electronics Co | FORWARD AIR vs. Richardson Electronics | FORWARD AIR vs. Nucletron Electronic Aktiengesellschaft | FORWARD AIR vs. STMicroelectronics NV |
| SINGAPORE POST vs. SYSTEMAIR AB | SINGAPORE POST vs. Air New Zealand | SINGAPORE POST vs. Pentair plc | SINGAPORE POST vs. FORWARD AIR P |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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