Correlation Between FORWARD AIR and ESSILORLUXOTTICA

Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on FORWARD AIR and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and ESSILORLUXOTTICA.

Diversification Opportunities for FORWARD AIR and ESSILORLUXOTTICA

0.0

Correlation Coefficient

FORWARD AIR  ESSILORLUXOTTICA

Pay attention - limited upside

The 3 months correlation between FORWARD and ESSILORLUXOTTICA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSILORLUXOTTICA 12ON has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and ESSILORLUXOTTICA go up and down completely randomly.

Pair Corralation between FORWARD AIR and ESSILORLUXOTTICA

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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FORWARD AIR P  vs.  ESSILORLUXOTTICA 12ON

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.

ESSILORLUXOTTICA 12ON

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days ESSILORLUXOTTICA 12ON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, ESSILORLUXOTTICA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FORWARD AIR and ESSILORLUXOTTICA

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

The idea behind FORWARD AIR P and ESSILORLUXOTTICA 12ON 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.