Correlation Between Forward Air and Hub
Can any of the company-specific risk be diversified away by investing in both Forward Air and Hub 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 Hub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forward Air and Hub Group, you can compare the effects of market volatilities on Forward Air and Hub 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 Hub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forward Air and Hub.
Diversification Opportunities for Forward Air and Hub
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Forward and Hub is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Forward Air and Hub Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Group 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 are associated (or correlated) with Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Group has no effect on the direction of Forward Air i.e., Forward Air and Hub go up and down completely randomly.
Pair Corralation between Forward Air and Hub
Given the investment horizon of 90 days Forward Air is expected to under-perform the Hub. In addition to that, Forward Air is 1.49 times more volatile than Hub Group. It trades about -0.01 of its total potential returns per unit of risk. Hub Group is currently generating about 0.03 per unit of volatility. If you would invest 4,431 in Hub Group on November 5, 2024 and sell it today you would earn a total of 30.00 from holding Hub Group or generate 0.68% 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 vs. Hub Group
Performance |
| Timeline |
| Forward Air |
| Hub Group |
Forward Air and Hub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forward Air and Hub
The main advantage of trading using opposite Forward Air and Hub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forward Air position performs unexpectedly, Hub 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 Hub will offset losses from the drop in Hub's long position.| Forward Air vs. Landstar System | Forward Air vs. JB Hunt Transport | Forward Air vs. Expeditors International of | Forward Air vs. CH Robinson Worldwide |
| Hub vs. Landstar System | Hub vs. JB Hunt Transport | Hub vs. Expeditors International of | Hub vs. CH Robinson Worldwide |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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