Correlation Between Forward Air and Adm Tronics

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

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

Diversification Opportunities for Forward Air and Adm Tronics

-0.45

Correlation Coefficient

Forward Air  Adm Tronics

Very good diversification

The 3 months correlation between Forward and Adm is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Forward Air and Adm Tronics Unltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adm Tronics Unltd 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 Adm Tronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adm Tronics Unltd has no effect on the direction of Forward Air i.e., Forward Air and Adm Tronics go up and down completely randomly.

Pair Corralation between Forward Air and Adm Tronics

Given the investment horizon of 90 days Forward Air is expected to generate 1.44 times less return on investment than Adm Tronics. But when comparing it to its historical volatility, Forward Air is 2.09 times less risky than Adm Tronics. It trades about 0.1 of its potential returns per unit of risk. Adm Tronics Unltd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  6.15  in Adm Tronics Unltd on July 13, 2025 and sell it today you would earn a total of  2.35  from holding Adm Tronics Unltd or generate 38.21% return on investment over 90 days.

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

Forward Air  vs.  Adm Tronics Unltd

Forward Air

Risk-Adjusted Performance

Weakest

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 November 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Adm Tronics Unltd

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Adm Tronics Unltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Adm Tronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forward Air and Adm Tronics

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

The idea behind Forward Air and Adm Tronics Unltd 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.