Correlation Between FORWARD AIR and CSL

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

Diversification Opportunities for FORWARD AIR and CSL

0.54

Correlation Coefficient

FORWARD AIR  CSL

Very weak diversification

The 3 months correlation between FORWARD and CSL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding FORWARD AIR P and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of FORWARD AIR i.e., FORWARD AIR and CSL go up and down completely randomly.

Pair Corralation between FORWARD AIR and CSL

Assuming the 90 days horizon FORWARD AIR P is expected to generate 2.67 times more return on investment than CSL. However, FORWARD AIR is 2.67 times more volatile than CSL LTD SPONADR. It trades about 0.18 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.1 per unit of risk. If you would invest  1,650  in FORWARD AIR P on May 17, 2025 and sell it today you would earn a total of  790.00  from holding FORWARD AIR P or generate 47.88% return on investment over 90 days.

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

FORWARD AIR P  vs.  CSL LTD SPONADR

FORWARD AIR P

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FORWARD AIR P are ranked lower than 14 (%) 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.

CSL LTD SPONADR

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CSL LTD SPONADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with FORWARD AIR and CSL

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

The idea behind FORWARD AIR P and CSL LTD SPONADR 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.