Correlation Between FORWARD AIR and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on FORWARD AIR and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Thyssenkrupp.
Diversification Opportunities for FORWARD AIR and Thyssenkrupp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORWARD and Thyssenkrupp is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Thyssenkrupp go up and down completely randomly.
Pair Corralation between FORWARD AIR and Thyssenkrupp
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, FORWARD AIR P is 1.11 times less risky than Thyssenkrupp. The stock trades about 0.0 of its potential returns per unit of risk. The thyssenkrupp AG is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 401.00 in thyssenkrupp AG on November 6, 2024 and sell it today you would earn a total of 81.00 from holding thyssenkrupp AG or generate 20.2% 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. thyssenkrupp AG
Performance |
| Timeline |
| FORWARD AIR P |
| thyssenkrupp AG |
FORWARD AIR and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and Thyssenkrupp
The main advantage of trading using opposite FORWARD AIR and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| FORWARD AIR vs. MGIC INVESTMENT | FORWARD AIR vs. Corsair Gaming | FORWARD AIR vs. Altair Engineering | FORWARD AIR vs. RYANAIR HLDGS ADR |
| Thyssenkrupp vs. HAVERTY FURNITURE A | Thyssenkrupp vs. Genertec Universal Medical | Thyssenkrupp vs. Autohome ADR | Thyssenkrupp vs. INVITATION HOMES DL |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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