Correlation Between Boeing and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both Boeing 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 Boeing and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and GXO Logistics, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and GXO Logistics.
Diversification Opportunities for Boeing and GXO Logistics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and GXO is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and Boeing 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 The Boeing 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 Boeing i.e., Boeing and GXO Logistics go up and down completely randomly.
Pair Corralation between Boeing and GXO Logistics
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the GXO Logistics. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 1.11 times less risky than GXO Logistics. The stock trades about -0.06 of its potential returns per unit of risk. The GXO Logistics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,898 in GXO Logistics on August 24, 2024 and sell it today you would earn a total of 1,102 from holding GXO Logistics or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. GXO Logistics
Performance |
| Timeline |
| Boeing |
| GXO Logistics |
Boeing and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and GXO Logistics
The main advantage of trading using opposite Boeing and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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.| Boeing vs. Small Cap Core | Boeing vs. Freedom Holding Corp | Boeing vs. Gfl Environmental Holdings | Boeing vs. Growth Fund Of |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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