Correlation Between SEALED AIR and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both SEALED AIR 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 SEALED AIR and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and FORWARD AIR P, you can compare the effects of market volatilities on SEALED AIR 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 SEALED AIR with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and FORWARD AIR.
Diversification Opportunities for SEALED AIR and FORWARD AIR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEALED and FORWARD is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR 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 SEALED 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 SEALED AIR 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 SEALED AIR i.e., SEALED AIR and FORWARD AIR go up and down completely randomly.
Pair Corralation between SEALED AIR and FORWARD AIR
Assuming the 90 days trading horizon SEALED AIR is expected to generate 1.81 times less return on investment than FORWARD AIR. But when comparing it to its historical volatility, SEALED AIR is 2.74 times less risky than FORWARD AIR. It trades about 0.1 of its potential returns per unit of risk. FORWARD AIR P is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,960 in FORWARD AIR P on August 30, 2024 and sell it today you would earn a total of 420.00 from holding FORWARD AIR P or generate 14.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. FORWARD AIR P
Performance |
| Timeline |
| SEALED AIR |
| FORWARD AIR P |
SEALED AIR and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and FORWARD AIR
The main advantage of trading using opposite SEALED AIR and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR 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.| SEALED AIR vs. Tower One Wireless | SEALED AIR vs. Pembina Pipeline Corp | SEALED AIR vs. Corporate Office Properties | SEALED AIR vs. Infrastrutture Wireless Italiane |
| FORWARD AIR vs. Data3 Limited | FORWARD AIR vs. PLAYTIKA HOLDING DL 01 | FORWARD AIR vs. DOCDATA | FORWARD AIR vs. CNVISION MEDIA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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