Correlation Between FORWARD AIR and PT Solusi

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

Diversification Opportunities for FORWARD AIR and PT Solusi

0.17

Correlation Coefficient

FORWARD AIR  PT Solusi

Average diversification

The 3 months correlation between FORWARD and RU6 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and PT Solusi Bangun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Solusi Bangun 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 PT Solusi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Solusi Bangun has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and PT Solusi go up and down completely randomly.

Pair Corralation between FORWARD AIR and PT Solusi

Assuming the 90 days horizon FORWARD AIR P is expected to under-perform the PT Solusi. But the stock apears to be less risky and, when comparing its historical volatility, FORWARD AIR P is 4.62 times less risky than PT Solusi. The stock trades about -0.21 of its potential returns per unit of risk. The PT Solusi Bangun is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3.50  in PT Solusi Bangun on December 19, 2024 and sell it today you would lose (0.05) from holding PT Solusi Bangun or give up 1.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

FORWARD AIR P  vs.  PT Solusi Bangun

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 uncertain 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.

PT Solusi Bangun

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Solusi Bangun are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PT Solusi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORWARD AIR and PT Solusi

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

The idea behind FORWARD AIR P and PT Solusi Bangun 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.