Correlation Between FORWARD AIR and Axcelis Technologies

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

Diversification Opportunities for FORWARD AIR and Axcelis Technologies

-0.35

Correlation Coefficient

FORWARD AIR  Axcelis Technologies

Very good diversification

The 3 months correlation between FORWARD and Axcelis is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies 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 Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Axcelis Technologies go up and down completely randomly.

Pair Corralation between FORWARD AIR and Axcelis Technologies

Assuming the 90 days horizon FORWARD AIR P is expected to generate 1.78 times more return on investment than Axcelis Technologies. However, FORWARD AIR is 1.78 times more volatile than Axcelis Technologies. It trades about 0.08 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.14 per unit of risk. If you would invest  2,840  in FORWARD AIR P on September 3, 2024 and sell it today you would earn a total of  520.00  from holding FORWARD AIR P or generate 18.31% return on investment over 90 days.

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

FORWARD AIR P  vs.  Axcelis Technologies

FORWARD AIR P

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FORWARD AIR P are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FORWARD AIR reported solid returns over the last few months and may actually be approaching a breakup point.

Axcelis Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axcelis Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FORWARD AIR and Axcelis Technologies

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

The idea behind FORWARD AIR P and Axcelis Technologies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.