Correlation Between FORWARD AIR and Compagnie

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

Diversification Opportunities for FORWARD AIR and Compagnie

-0.81

Correlation Coefficient

FORWARD AIR  Compagnie

Pay attention - limited upside

The 3 months correlation between FORWARD and Compagnie is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Compagnie go up and down completely randomly.

Pair Corralation between FORWARD AIR and Compagnie

Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the Compagnie. In addition to that, FORWARD AIR is 1.81 times more volatile than Compagnie de Saint Gobain. It trades about -0.14 of its total potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.13 per unit of volatility. If you would invest  8,482  in Compagnie de Saint Gobain on December 22, 2024 and sell it today you would earn a total of  1,440  from holding Compagnie de Saint Gobain or generate 16.98% return on investment over 90 days.

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

FORWARD AIR P  vs.  Compagnie de Saint Gobain

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 fragile 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.

Compagnie de Saint

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Compagnie unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORWARD AIR and Compagnie

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

The idea behind FORWARD AIR P and Compagnie de Saint Gobain 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.