Correlation Between ETFS Coffee and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee 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 ETFS Coffee and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and FORWARD AIR P, you can compare the effects of market volatilities on ETFS Coffee 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 ETFS Coffee with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and FORWARD AIR.
Diversification Opportunities for ETFS Coffee and FORWARD AIR
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ETFS and FORWARD is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC 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 ETFS Coffee 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 ETFS Coffee ETC 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 ETFS Coffee i.e., ETFS Coffee and FORWARD AIR go up and down completely randomly.
Pair Corralation between ETFS Coffee and FORWARD AIR
Assuming the 90 days trading horizon ETFS Coffee is expected to generate 5.65 times less return on investment than FORWARD AIR. But when comparing it to its historical volatility, ETFS Coffee ETC is 2.1 times less risky than FORWARD AIR. It trades about 0.05 of its potential returns per unit of risk. FORWARD AIR P is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,000 in FORWARD AIR P on October 20, 2024 and sell it today you would earn a total of 240.00 from holding FORWARD AIR P or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
ETFS Coffee ETC vs. FORWARD AIR P
Performance |
| Timeline |
| ETFS Coffee ETC |
| FORWARD AIR P |
ETFS Coffee and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and FORWARD AIR
The main advantage of trading using opposite ETFS Coffee and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee 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.| ETFS Coffee vs. Virtus Investment Partners | ETFS Coffee vs. CITY OFFICE REIT | ETFS Coffee vs. MidCap Financial Investment | ETFS Coffee vs. Addus HomeCare |
| FORWARD AIR vs. ETFS Coffee ETC | FORWARD AIR vs. ALBIS LEASING AG | FORWARD AIR vs. VARIOUS EATERIES LS | FORWARD AIR vs. GRENKELEASING Dusseldorf |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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