Correlation Between LION ONE and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and FORWARD AIR P, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and FORWARD AIR.
Diversification Opportunities for LION ONE and FORWARD AIR
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LION and FORWARD is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS 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 LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and FORWARD AIR go up and down completely randomly.
Pair Corralation between LION ONE and FORWARD AIR
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the FORWARD AIR. But the stock apears to be less risky and, when comparing its historical volatility, LION ONE METALS is 1.23 times less risky than FORWARD AIR. The stock trades about -0.07 of its potential returns per unit of risk. The FORWARD AIR P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,028 in FORWARD AIR P on September 1, 2024 and sell it today you would lose (2,668) from holding FORWARD AIR P or give up 44.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. FORWARD AIR P
Performance |
| Timeline |
| LION ONE METALS |
| FORWARD AIR P |
LION ONE and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and FORWARD AIR
The main advantage of trading using opposite LION ONE and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. Corporate Office Properties | LION ONE vs. Eagle Materials | LION ONE vs. Plastic Omnium | LION ONE vs. KENEDIX OFFICE INV |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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