Correlation Between Forward Air and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Forward Air and Proficient Auto 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 Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forward Air and Proficient Auto Logistics,, you can compare the effects of market volatilities on Forward Air and Proficient Auto 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 Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forward Air and Proficient Auto.
Diversification Opportunities for Forward Air and Proficient Auto
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Forward and Proficient is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Forward Air and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Forward Air i.e., Forward Air and Proficient Auto go up and down completely randomly.
Pair Corralation between Forward Air and Proficient Auto
Given the investment horizon of 90 days Forward Air is expected to under-perform the Proficient Auto. In addition to that, Forward Air is 1.09 times more volatile than Proficient Auto Logistics,. It trades about -0.04 of its total potential returns per unit of risk. Proficient Auto Logistics, is currently generating about -0.05 per unit of volatility. If you would invest 1,500 in Proficient Auto Logistics, on November 5, 2024 and sell it today you would lose (516.00) from holding Proficient Auto Logistics, or give up 34.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 37.45% |
| Values | Daily Returns |
Forward Air vs. Proficient Auto Logistics,
Performance |
| Timeline |
| Forward Air |
| Proficient Auto Logi |
Forward Air and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forward Air and Proficient Auto
The main advantage of trading using opposite Forward Air and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forward Air position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto'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 |
| Proficient Auto vs. Expeditors International of | Proficient Auto vs. FedEx | Proficient Auto vs. BingEx | Proficient Auto vs. Globavend Holdings Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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