Correlation Between Tradegate and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both Tradegate and FORWARD AIR 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 Tradegate and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and FORWARD AIR P, you can compare the effects of market volatilities on Tradegate and FORWARD AIR 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 Tradegate with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and FORWARD AIR.
Diversification Opportunities for Tradegate and FORWARD AIR
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tradegate and FORWARD is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of Tradegate i.e., Tradegate and FORWARD AIR go up and down completely randomly.
Pair Corralation between Tradegate and FORWARD AIR
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.2 times more return on investment than FORWARD AIR. However, Tradegate AG Wertpapierhandelsbank is 4.94 times less risky than FORWARD AIR. It trades about 0.0 of its potential returns per unit of risk. FORWARD AIR P is currently generating about -0.02 per unit of risk. If you would invest 8,850 in Tradegate AG Wertpapierhandelsbank on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. FORWARD AIR P
Performance |
Timeline |
Tradegate AG Wertpap |
FORWARD AIR P |
Tradegate and FORWARD AIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tradegate and FORWARD AIR
The main advantage of trading using opposite Tradegate and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate position performs unexpectedly, FORWARD AIR 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 FORWARD AIR will offset losses from the drop in FORWARD AIR's long position.Tradegate vs. Corporate Office Properties | Tradegate vs. Salesforce | Tradegate vs. National Retail Properties | Tradegate vs. TRADELINK ELECTRON |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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