Correlation Between A2Z Smart and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both A2Z Smart and GXO Logistics 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 A2Z Smart and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A2Z Smart Technologies and GXO Logistics, you can compare the effects of market volatilities on A2Z Smart and GXO Logistics 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 A2Z Smart with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2Z Smart and GXO Logistics.
Diversification Opportunities for A2Z Smart and GXO Logistics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between A2Z and GXO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding A2Z Smart Technologies and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and A2Z Smart 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 A2Z Smart Technologies are associated (or correlated) with GXO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GXO Logistics has no effect on the direction of A2Z Smart i.e., A2Z Smart and GXO Logistics go up and down completely randomly.
Pair Corralation between A2Z Smart and GXO Logistics
Allowing for the 90-day total investment horizon A2Z Smart Technologies is expected to generate 3.23 times more return on investment than GXO Logistics. However, A2Z Smart is 3.23 times more volatile than GXO Logistics. It trades about 0.23 of its potential returns per unit of risk. GXO Logistics is currently generating about 0.08 per unit of risk. If you would invest 105.00 in A2Z Smart Technologies on August 24, 2024 and sell it today you would earn a total of 538.00 from holding A2Z Smart Technologies or generate 512.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
A2Z Smart Technologies vs. GXO Logistics
Performance |
| Timeline |
| A2Z Smart Technologies |
| GXO Logistics |
A2Z Smart and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A2Z Smart and GXO Logistics
The main advantage of trading using opposite A2Z Smart and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2Z Smart position performs unexpectedly, GXO Logistics 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 GXO Logistics will offset losses from the drop in GXO Logistics' long position.| A2Z Smart vs. Nauticus Robotics | A2Z Smart vs. Innovative Solutions and | A2Z Smart vs. National Presto Industries | A2Z Smart vs. Hexcel |
| GXO Logistics vs. Forward Air | GXO Logistics vs. Landstar System | GXO Logistics vs. JB Hunt Transport | GXO Logistics vs. Expeditors International of |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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