Correlation Between FORWARD AIR and GRIFFIN MINING

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

Diversification Opportunities for FORWARD AIR and GRIFFIN MINING

0.04

Correlation Coefficient

FORWARD AIR  GRIFFIN MINING

Significant diversification

The 3 months correlation between FORWARD and GRIFFIN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD 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 GRIFFIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIFFIN MINING LTD has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between FORWARD AIR and GRIFFIN MINING

Assuming the 90 days horizon FORWARD AIR P is expected to generate 2.14 times more return on investment than GRIFFIN MINING. However, FORWARD AIR is 2.14 times more volatile than GRIFFIN MINING LTD. It trades about 0.04 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.04 per unit of risk. If you would invest  3,040  in FORWARD AIR P on September 13, 2024 and sell it today you would earn a total of  140.00  from holding FORWARD AIR P or generate 4.61% return on investment over 90 days.

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

FORWARD AIR P  vs.  GRIFFIN MINING LTD

FORWARD AIR P

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FORWARD AIR P are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FORWARD AIR may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GRIFFIN MINING LTD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRIFFIN MINING LTD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, GRIFFIN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FORWARD AIR and GRIFFIN MINING

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

The idea behind FORWARD AIR P and GRIFFIN MINING LTD 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.