Correlation Between FORWARD AIR and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and BW OFFSHORE 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 BW OFFSHORE 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 BW OFFSHORE LTD, you can compare the effects of market volatilities on FORWARD AIR and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and BW OFFSHORE.
Diversification Opportunities for FORWARD AIR and BW OFFSHORE
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FORWARD and XY81 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and BW OFFSHORE go up and down completely randomly.
Pair Corralation between FORWARD AIR and BW OFFSHORE
Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the BW OFFSHORE. In addition to that, FORWARD AIR is 1.21 times more volatile than BW OFFSHORE LTD. It trades about -0.05 of its total potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.11 per unit of volatility. If you would invest 238.00 in BW OFFSHORE LTD on October 30, 2024 and sell it today you would earn a total of 21.00 from holding BW OFFSHORE LTD or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORWARD AIR P vs. BW OFFSHORE LTD
Performance |
| Timeline |
| FORWARD AIR P |
| BW OFFSHORE LTD |
FORWARD AIR and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORWARD AIR and BW OFFSHORE
The main advantage of trading using opposite FORWARD AIR and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| FORWARD AIR vs. KINGBOARD CHEMICAL | FORWARD AIR vs. China BlueChemical | FORWARD AIR vs. COMPUTERSHARE | FORWARD AIR vs. SCOTT TECHNOLOGY |
| BW OFFSHORE vs. The Hanover Insurance | BW OFFSHORE vs. Goosehead Insurance | BW OFFSHORE vs. REINET INVESTMENTS SCA | BW OFFSHORE vs. Apollo Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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