Correlation Between Expeditors International and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both Expeditors International 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 Expeditors International and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expeditors International of and GXO Logistics, you can compare the effects of market volatilities on Expeditors International 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 Expeditors International with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expeditors International and GXO Logistics.
Diversification Opportunities for Expeditors International and GXO Logistics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expeditors and GXO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and Expeditors International 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 Expeditors International of 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 Expeditors International i.e., Expeditors International and GXO Logistics go up and down completely randomly.
Pair Corralation between Expeditors International and GXO Logistics
Given the investment horizon of 90 days Expeditors International is expected to generate 8.02 times less return on investment than GXO Logistics. But when comparing it to its historical volatility, Expeditors International of is 1.86 times less risky than GXO Logistics. It trades about 0.02 of its potential returns per unit of risk. 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 |
Expeditors International of vs. GXO Logistics
Performance |
| Timeline |
| Expeditors International |
| GXO Logistics |
Expeditors International and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expeditors International and GXO Logistics
The main advantage of trading using opposite Expeditors International and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expeditors International 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.| Expeditors International vs. Landstar System | Expeditors International vs. JB Hunt Transport | Expeditors International vs. Hub Group | Expeditors International vs. Forward Air |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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