Correlation Between FORWARD AIR and Mr Cooper

Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Mr Cooper 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 Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FORWARD AIR P and Mr Cooper Group, you can compare the effects of market volatilities on FORWARD AIR and Mr Cooper 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 Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Mr Cooper.

Diversification Opportunities for FORWARD AIR and Mr Cooper

-0.01

Correlation Coefficient

FORWARD AIR  Mr Cooper

Good diversification

The 3 months correlation between FORWARD and 07WA is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Mr Cooper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Cooper Group 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 P are associated (or correlated) with Mr Cooper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Cooper Group has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Mr Cooper go up and down completely randomly.

Pair Corralation between FORWARD AIR and Mr Cooper

Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the Mr Cooper. In addition to that, FORWARD AIR is 2.34 times more volatile than Mr Cooper Group. It trades about -0.01 of its total potential returns per unit of risk. Mr Cooper Group is currently generating about 0.09 per unit of volatility. If you would invest  8,394  in Mr Cooper Group on October 9, 2024 and sell it today you would earn a total of  794.00  from holding Mr Cooper Group or generate 9.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FORWARD AIR P  vs.  Mr Cooper Group

FORWARD AIR P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FORWARD AIR P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FORWARD AIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mr Cooper Group

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mr Cooper Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Mr Cooper may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FORWARD AIR and Mr Cooper

The main advantage of trading using opposite FORWARD AIR and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Mr Cooper 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 Mr Cooper will offset losses from the drop in Mr Cooper's long position.

The idea behind FORWARD AIR P and Mr Cooper Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.