Correlation Between FORWARD AIR and Five Below

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

Diversification Opportunities for FORWARD AIR and Five Below

0.76

Correlation Coefficient

FORWARD AIR  Five Below

Poor diversification

The 3 months correlation between FORWARD and Five is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below 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 Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Five Below go up and down completely randomly.

Pair Corralation between FORWARD AIR and Five Below

Assuming the 90 days horizon FORWARD AIR is expected to generate 1.01 times less return on investment than Five Below. In addition to that, FORWARD AIR is 1.52 times more volatile than Five Below. It trades about 0.23 of its total potential returns per unit of risk. Five Below is currently generating about 0.36 per unit of volatility. If you would invest  6,240  in Five Below on April 22, 2025 and sell it today you would earn a total of  5,785  from holding Five Below or generate 92.71% return on investment over 90 days.

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

FORWARD AIR P  vs.  Five Below

FORWARD AIR P

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FORWARD AIR P are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FORWARD AIR reported solid returns over the last few months and may actually be approaching a breakup point.

Five Below

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Five Below are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Five Below reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORWARD AIR and Five Below

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

The idea behind FORWARD AIR P and Five Below 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.