Correlation Between FORWARD AIR and Assured Guaranty
Can any of the company-specific risk be diversified away by investing in both FORWARD AIR and Assured Guaranty 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 Assured Guaranty 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 Assured Guaranty, you can compare the effects of market volatilities on FORWARD AIR and Assured Guaranty 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 Assured Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORWARD AIR and Assured Guaranty.
Diversification Opportunities for FORWARD AIR and Assured Guaranty
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FORWARD and Assured is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty 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 Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and Assured Guaranty go up and down completely randomly.
Pair Corralation between FORWARD AIR and Assured Guaranty
Assuming the 90 days horizon FORWARD AIR P is expected to generate 2.17 times more return on investment than Assured Guaranty. However, FORWARD AIR is 2.17 times more volatile than Assured Guaranty. It trades about 0.23 of its potential returns per unit of risk. Assured Guaranty is currently generating about -0.02 per unit of risk. If you would invest 1,250 in FORWARD AIR P on April 22, 2025 and sell it today you would earn a total of 1,065 from holding FORWARD AIR P or generate 85.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FORWARD AIR P vs. Assured Guaranty
Performance |
Timeline |
FORWARD AIR P |
Assured Guaranty |
FORWARD AIR and Assured Guaranty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FORWARD AIR and Assured Guaranty
The main advantage of trading using opposite FORWARD AIR and Assured Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORWARD AIR position performs unexpectedly, Assured Guaranty 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 Assured Guaranty will offset losses from the drop in Assured Guaranty's long position.FORWARD AIR vs. Regions Financial | FORWARD AIR vs. Cincinnati Financial Corp | FORWARD AIR vs. Odyssean Investment Trust | FORWARD AIR vs. Erste Group Bank |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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