Correlation Between FORWARD AIR and Onxeo SA

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

Diversification Opportunities for FORWARD AIR and Onxeo SA

0.37

Correlation Coefficient

FORWARD AIR  Onxeo SA

Weak diversification

The 3 months correlation between FORWARD and Onxeo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Onxeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onxeo SA 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 Onxeo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onxeo SA has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Onxeo SA go up and down completely randomly.

Pair Corralation between FORWARD AIR and Onxeo SA

Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the Onxeo SA. But the stock apears to be less risky and, when comparing its historical volatility, FORWARD AIR P is 3.86 times less risky than Onxeo SA. The stock trades about -0.15 of its potential returns per unit of risk. The Onxeo SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8.29  in Onxeo SA on December 29, 2024 and sell it today you would lose (1.81) from holding Onxeo SA or give up 21.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FORWARD AIR P  vs.  Onxeo SA

FORWARD AIR P

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Onxeo SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Onxeo SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Onxeo SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORWARD AIR and Onxeo SA

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

The idea behind FORWARD AIR P and Onxeo SA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.