Correlation Between FORWARD AIR and Deutsche Bank

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

Diversification Opportunities for FORWARD AIR and Deutsche Bank

-0.28

Correlation Coefficient

FORWARD AIR  Deutsche Bank

Very good diversification

The 3 months correlation between FORWARD and Deutsche is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Deutsche Bank go up and down completely randomly.

Pair Corralation between FORWARD AIR and Deutsche Bank

Assuming the 90 days horizon FORWARD AIR P is expected to generate 2.62 times more return on investment than Deutsche Bank. However, FORWARD AIR is 2.62 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.31 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.7 per unit of risk. If you would invest  2,740  in FORWARD AIR P on October 24, 2024 and sell it today you would earn a total of  480.00  from holding FORWARD AIR P or generate 17.52% 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.  Deutsche Bank Aktiengesellscha

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Deutsche Bank Aktien

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, Deutsche Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORWARD AIR and Deutsche Bank

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

The idea behind FORWARD AIR P and Deutsche Bank Aktiengesellschaft 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.