Correlation Between FORWARD AIR and United Internet
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and United Internet 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 United Internet 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 United Internet AG, you can compare the effects of market volatilities on FORWARD AIR and United Internet 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 United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and United Internet.
Diversification Opportunities for FORWARD AIR and United Internet
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between FORWARD and United is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet 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 United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and United Internet go up and down completely randomly.
Pair Corralation between FORWARD AIR and United Internet
Assuming the 90 days horizon FORWARD AIR P is expected to generate 1.84 times more return on investment than United Internet. However, FORWARD AIR is 1.84 times more volatile than United Internet AG. It trades about 0.09 of its potential returns per unit of risk. United Internet AG is currently generating about -0.24 per unit of risk. If you would invest 3,100 in FORWARD AIR P on September 5, 2024 and sell it today you would earn a total of 300.00 from holding FORWARD AIR P or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FORWARD AIR P vs. United Internet AG
Performance |
| Timeline |
| FORWARD AIR P |
| United Internet AG |
FORWARD AIR and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and United Internet
The main advantage of trading using opposite FORWARD AIR and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| FORWARD AIR vs. USWE SPORTS AB | FORWARD AIR vs. National Health Investors | FORWARD AIR vs. Bumrungrad Hospital Public | FORWARD AIR vs. Cardinal Health |
| United Internet vs. Air New Zealand | United Internet vs. Materialise NV | United Internet vs. FORWARD AIR P | United Internet vs. Fair Isaac Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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