Correlation Between Forward Air and Addentax Group

Can any of the company-specific risk be diversified away by investing in both Forward Air and Addentax Group 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 Addentax Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Forward Air and Addentax Group Corp, you can compare the effects of market volatilities on Forward Air and Addentax Group 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 Addentax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forward Air and Addentax Group.

Diversification Opportunities for Forward Air and Addentax Group

0.8

Correlation Coefficient

Forward Air  Addentax Group

Very poor diversification

The 3 months correlation between Forward and Addentax is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Forward Air and Addentax Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addentax Group Corp 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 are associated (or correlated) with Addentax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addentax Group Corp has no effect on the direction of Forward Air i.e., Forward Air and Addentax Group go up and down completely randomly.

Pair Corralation between Forward Air and Addentax Group

Given the investment horizon of 90 days Forward Air is expected to generate 0.78 times more return on investment than Addentax Group. However, Forward Air is 1.27 times less risky than Addentax Group. It trades about 0.14 of its potential returns per unit of risk. Addentax Group Corp is currently generating about -0.08 per unit of risk. If you would invest  1,462  in Forward Air on February 24, 2025 and sell it today you would earn a total of  217.00  from holding Forward Air or generate 14.84% return on investment over 90 days.

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

Forward Air  vs.  Addentax Group Corp

Forward Air

Risk-Adjusted Performance

Very Weak

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

Addentax Group Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Addentax Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Forward Air and Addentax Group

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

The idea behind Forward Air and Addentax Group Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .