Correlation Between FORWARD AIR and QURATE RETAIL

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

Diversification Opportunities for FORWARD AIR and QURATE RETAIL

0.13

Correlation Coefficient

FORWARD AIR  QURATE RETAIL

Average diversification

The 3 months correlation between FORWARD and QURATE is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL INC 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 QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and QURATE RETAIL go up and down completely randomly.

Pair Corralation between FORWARD AIR and QURATE RETAIL

Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the QURATE RETAIL. In addition to that, FORWARD AIR is 1.04 times more volatile than QURATE RETAIL INC. It trades about -0.03 of its total potential returns per unit of risk. QURATE RETAIL INC is currently generating about -0.01 per unit of volatility. If you would invest  328.00  in QURATE RETAIL INC on September 26, 2024 and sell it today you would lose (26.00) from holding QURATE RETAIL INC or give up 7.93% of portfolio value over 90 days.

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

FORWARD AIR P  vs.  QURATE RETAIL INC

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

QURATE RETAIL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QURATE RETAIL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, QURATE RETAIL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FORWARD AIR and QURATE RETAIL

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

The idea behind FORWARD AIR P and QURATE RETAIL INC 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.