Correlation Between FedEx and Deutsche Post
Can any of the company-specific risk be diversified away by investing in both FedEx and Deutsche Post 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 FedEx and Deutsche Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedEx and Deutsche Post AG, you can compare the effects of market volatilities on FedEx and Deutsche Post 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 FedEx with a short position of Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedEx and Deutsche Post.
Diversification Opportunities for FedEx and Deutsche Post
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FedEx and Deutsche is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding FedEx and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG and FedEx 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 FedEx are associated (or correlated) with Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of FedEx i.e., FedEx and Deutsche Post go up and down completely randomly.
Pair Corralation between FedEx and Deutsche Post
Assuming the 90 days horizon FedEx is expected to generate 1.14 times more return on investment than Deutsche Post. However, FedEx is 1.14 times more volatile than Deutsche Post AG. It trades about 0.04 of its potential returns per unit of risk. Deutsche Post AG is currently generating about -0.02 per unit of risk. If you would invest 23,453 in FedEx on August 29, 2024 and sell it today you would earn a total of 5,332 from holding FedEx or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FedEx vs. Deutsche Post AG
Performance |
| Timeline |
| FedEx |
| Deutsche Post AG |
FedEx and Deutsche Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedEx and Deutsche Post
The main advantage of trading using opposite FedEx and Deutsche Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedEx position performs unexpectedly, Deutsche Post 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 Deutsche Post will offset losses from the drop in Deutsche Post's long position.| FedEx vs. DICKS Sporting Goods | FedEx vs. SPORTING | FedEx vs. Ming Le Sports | FedEx vs. Air Transport Services |
| Deutsche Post vs. ZTO Express | Deutsche Post vs. Expeditors International of | Deutsche Post vs. Superior Plus Corp | Deutsche Post vs. Origin Agritech |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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