Correlation Between Safety Insurance and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and FORWARD AIR P, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and FORWARD AIR.
Diversification Opportunities for Safety Insurance and FORWARD AIR
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Safety and FORWARD is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group 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 Safety Insurance 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 Safety Insurance Group 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 Safety Insurance i.e., Safety Insurance and FORWARD AIR go up and down completely randomly.
Pair Corralation between Safety Insurance and FORWARD AIR
Assuming the 90 days horizon Safety Insurance Group is expected to generate 0.29 times more return on investment than FORWARD AIR. However, Safety Insurance Group is 3.4 times less risky than FORWARD AIR. It trades about 0.03 of its potential returns per unit of risk. FORWARD AIR P is currently generating about -0.01 per unit of risk. If you would invest 6,867 in Safety Insurance Group on November 5, 2024 and sell it today you would earn a total of 633.00 from holding Safety Insurance Group or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. FORWARD AIR P
Performance |
| Timeline |
| Safety Insurance |
| FORWARD AIR P |
Safety Insurance and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and FORWARD AIR
The main advantage of trading using opposite Safety Insurance and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. Commercial Vehicle Group | Safety Insurance vs. Penta Ocean Construction Co | Safety Insurance vs. Daito Trust Construction | Safety Insurance vs. GEELY AUTOMOBILE |
| FORWARD AIR vs. MTY Food Group | FORWARD AIR vs. MOLSON RS BEVERAGE | FORWARD AIR vs. PATTIES FOODS | FORWARD AIR vs. China Resources Beer |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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