Correlation Between FORWARD AIR and Intel

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

Diversification Opportunities for FORWARD AIR and Intel

0.3

Correlation Coefficient

FORWARD AIR  Intel

Weak diversification

The 3 months correlation between FORWARD and Intel is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Intel go up and down completely randomly.

Pair Corralation between FORWARD AIR and Intel

Assuming the 90 days horizon FORWARD AIR P is expected to generate 0.65 times more return on investment than Intel. However, FORWARD AIR P is 1.53 times less risky than Intel. It trades about -0.03 of its potential returns per unit of risk. Intel is currently generating about -0.21 per unit of risk. If you would invest  3,080  in FORWARD AIR P on September 20, 2024 and sell it today you would lose (60.00) from holding FORWARD AIR P or give up 1.95% 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.  Intel

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.

Intel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Intel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FORWARD AIR and Intel

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

The idea behind FORWARD AIR P and Intel 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.