Correlation Between Coty and FEDEX
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By analyzing existing cross correlation between Coty Inc and FEDEX P 475, you can compare the effects of market volatilities on Coty and FEDEX 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 Coty with a short position of FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and FEDEX.
Diversification Opportunities for Coty and FEDEX
Poor diversification
The 3 months correlation between Coty and FEDEX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and FEDEX P 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 475 and Coty 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 Coty Inc are associated (or correlated) with FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 475 has no effect on the direction of Coty i.e., Coty and FEDEX go up and down completely randomly.
Pair Corralation between Coty and FEDEX
Given the investment horizon of 90 days Coty Inc is expected to generate 1.39 times more return on investment than FEDEX. However, Coty is 1.39 times more volatile than FEDEX P 475. It trades about 0.09 of its potential returns per unit of risk. FEDEX P 475 is currently generating about 0.04 per unit of risk. If you would invest 736.00 in Coty Inc on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Coty Inc or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Coty Inc vs. FEDEX P 475
Performance |
| Timeline |
| Coty Inc |
| FEDEX P 475 |
Coty and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and FEDEX
The main advantage of trading using opposite Coty and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.| Coty vs. Victory Integrity Smallmid Cap | Coty vs. Hilton Worldwide Holdings | Coty vs. NVIDIA | Coty vs. JPMorgan Chase Co |
| FEDEX vs. Hf Foods Group | FEDEX vs. Planet Fitness | FEDEX vs. Village Super Market | FEDEX vs. Playa Hotels Resorts |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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