Correlation Between Expeditors International and Royal Mail
Can any of the company-specific risk be diversified away by investing in both Expeditors International and Royal Mail 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 Royal Mail 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 Royal Mail PLC, you can compare the effects of market volatilities on Expeditors International and Royal Mail 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 Royal Mail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expeditors International and Royal Mail.
Diversification Opportunities for Expeditors International and Royal Mail
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expeditors and Royal is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and Royal Mail PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Mail PLC 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 Royal Mail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Mail PLC has no effect on the direction of Expeditors International i.e., Expeditors International and Royal Mail go up and down completely randomly.
Pair Corralation between Expeditors International and Royal Mail
Given the investment horizon of 90 days Expeditors International is expected to generate 8.48 times less return on investment than Royal Mail. But when comparing it to its historical volatility, Expeditors International of is 1.7 times less risky than Royal Mail. It trades about 0.01 of its potential returns per unit of risk. Royal Mail PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 558.00 in Royal Mail PLC on November 5, 2024 and sell it today you would earn a total of 340.00 from holding Royal Mail PLC or generate 60.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expeditors International of vs. Royal Mail PLC
Performance |
| Timeline |
| Expeditors International |
| Royal Mail PLC |
Expeditors International and Royal Mail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expeditors International and Royal Mail
The main advantage of trading using opposite Expeditors International and Royal Mail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expeditors International position performs unexpectedly, Royal Mail 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 Royal Mail will offset losses from the drop in Royal Mail's long position.| Expeditors International vs. GXO Logistics | Expeditors International vs. JB Hunt Transport | Expeditors International vs. CH Robinson Worldwide | Expeditors International vs. Hub Group |
| Royal Mail vs. FedEx | Royal Mail vs. United Parcel Service | Royal Mail vs. Freightos Limited Ordinary | Royal Mail vs. Addentax Group Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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