Correlation Between Forward Air and BioLife Solutions

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

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

Diversification Opportunities for Forward Air and BioLife Solutions

-0.38

Correlation Coefficient

Forward Air  BioLife Solutions

Very good diversification

The 3 months correlation between Forward and BioLife is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Forward Air and BioLife Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLife Solutions 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 BioLife Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLife Solutions has no effect on the direction of Forward Air i.e., Forward Air and BioLife Solutions go up and down completely randomly.

Pair Corralation between Forward Air and BioLife Solutions

Given the investment horizon of 90 days Forward Air is expected to generate 1.44 times more return on investment than BioLife Solutions. However, Forward Air is 1.44 times more volatile than BioLife Solutions. It trades about 0.25 of its potential returns per unit of risk. BioLife Solutions is currently generating about -0.06 per unit of risk. If you would invest  1,632  in Forward Air on May 9, 2025 and sell it today you would earn a total of  1,336  from holding Forward Air or generate 81.86% return on investment over 90 days.

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

Forward Air  vs.  BioLife Solutions

Forward Air

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Forward Air are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Forward Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

BioLife Solutions

Risk-Adjusted Performance

Weakest

Over the last 90 days BioLife Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Forward Air and BioLife Solutions

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

The idea behind Forward Air and BioLife Solutions 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.