Correlation Between Calibre Mining and FORWARD AIR

Can any of the company-specific risk be diversified away by investing in both Calibre Mining 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 Calibre Mining and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calibre Mining Corp and FORWARD AIR P, you can compare the effects of market volatilities on Calibre Mining 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 Calibre Mining with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and FORWARD AIR.

Diversification Opportunities for Calibre Mining and FORWARD AIR

0.24

Correlation Coefficient

Calibre Mining  FORWARD AIR

Modest diversification

The 3 months correlation between Calibre and FORWARD is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp 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 Calibre Mining 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 Calibre Mining Corp 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 Calibre Mining i.e., Calibre Mining and FORWARD AIR go up and down completely randomly.

Pair Corralation between Calibre Mining and FORWARD AIR

Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the FORWARD AIR. But the stock apears to be less risky and, when comparing its historical volatility, Calibre Mining Corp is 1.76 times less risky than FORWARD AIR. The stock trades about -0.1 of its potential returns per unit of risk. The FORWARD AIR P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,240  in FORWARD AIR P on September 23, 2024 and sell it today you would lose (300.00) from holding FORWARD AIR P or give up 9.26% of portfolio value over 90 days.

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

Calibre Mining Corp  vs.  FORWARD AIR P

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 nearly stable basic indicators, FORWARD AIR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Calibre Mining and FORWARD AIR

The main advantage of trading using opposite Calibre Mining and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining 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.

The idea behind Calibre Mining Corp and FORWARD AIR P 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..