Correlation Between COMMERCIAL VEHICLE and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE and FORWARD AIR 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 COMMERCIAL VEHICLE and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and FORWARD AIR P, you can compare the effects of market volatilities on COMMERCIAL VEHICLE and FORWARD AIR 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 COMMERCIAL VEHICLE with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and FORWARD AIR.
Diversification Opportunities for COMMERCIAL VEHICLE and FORWARD AIR
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMMERCIAL and FORWARD is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE are associated (or correlated) with FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and FORWARD AIR go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and FORWARD AIR
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to under-perform the FORWARD AIR. In addition to that, COMMERCIAL VEHICLE is 1.03 times more volatile than FORWARD AIR P. It trades about -0.1 of its total potential returns per unit of risk. FORWARD AIR P is currently generating about 0.02 per unit of volatility. If you would invest 3,380 in FORWARD AIR P on August 29, 2024 and sell it today you would lose (20.00) from holding FORWARD AIR P or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. FORWARD AIR P
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| FORWARD AIR P |
COMMERCIAL VEHICLE and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and FORWARD AIR
The main advantage of trading using opposite COMMERCIAL VEHICLE and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE position performs unexpectedly, FORWARD AIR 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 FORWARD AIR will offset losses from the drop in FORWARD AIR's long position.| COMMERCIAL VEHICLE vs. Apple Inc | COMMERCIAL VEHICLE vs. Apple Inc | COMMERCIAL VEHICLE vs. Superior Plus Corp | COMMERCIAL VEHICLE vs. SIVERS SEMICONDUCTORS AB |
| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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