Correlation Between FORWARD AIR and SOGECLAIR

Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and SOGECLAIR 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 SOGECLAIR 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 SOGECLAIR SA INH, you can compare the effects of market volatilities on FORWARD AIR and SOGECLAIR 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 SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and SOGECLAIR.

Diversification Opportunities for FORWARD AIR and SOGECLAIR

-0.22

Correlation Coefficient

FORWARD AIR  SOGECLAIR

Very good diversification

The 3 months correlation between FORWARD and SOGECLAIR is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH 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 SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and SOGECLAIR go up and down completely randomly.

Pair Corralation between FORWARD AIR and SOGECLAIR

Assuming the 90 days horizon FORWARD AIR P is expected to generate 0.62 times more return on investment than SOGECLAIR. However, FORWARD AIR P is 1.6 times less risky than SOGECLAIR. It trades about 0.27 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.11 per unit of risk. If you would invest  2,880  in FORWARD AIR P on October 25, 2024 and sell it today you would earn a total of  420.00  from holding FORWARD AIR P or generate 14.58% 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.  SOGECLAIR SA INH

FORWARD AIR P

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FORWARD AIR P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

SOGECLAIR SA INH

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOGECLAIR SA INH are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOGECLAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORWARD AIR and SOGECLAIR

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

The idea behind FORWARD AIR P and SOGECLAIR SA INH 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..