Correlation Between FedEx and FibroGen
Can any of the company-specific risk be diversified away by investing in both FedEx and FibroGen 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 FibroGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedEx and FibroGen, you can compare the effects of market volatilities on FedEx and FibroGen 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 FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedEx and FibroGen.
Diversification Opportunities for FedEx and FibroGen
Average diversification
The 3 months correlation between FedEx and FibroGen is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FedEx and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen 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 FibroGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibroGen has no effect on the direction of FedEx i.e., FedEx and FibroGen go up and down completely randomly.
Pair Corralation between FedEx and FibroGen
Assuming the 90 days trading horizon FedEx is expected to generate 0.35 times more return on investment than FibroGen. However, FedEx is 2.89 times less risky than FibroGen. It trades about 0.12 of its potential returns per unit of risk. FibroGen is currently generating about -0.06 per unit of risk. If you would invest 435,228 in FedEx on September 1, 2024 and sell it today you would earn a total of 181,722 from holding FedEx or generate 41.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FedEx vs. FibroGen
Performance |
| Timeline |
| FedEx |
| FibroGen |
FedEx and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedEx and FibroGen
The main advantage of trading using opposite FedEx and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedEx position performs unexpectedly, FibroGen 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 FibroGen will offset losses from the drop in FibroGen's long position.| FedEx vs. Genworth Financial | FedEx vs. Grupo Sports World | FedEx vs. Capital One Financial | FedEx vs. Monster Beverage Corp |
| FibroGen vs. Deutsche Bank Aktiengesellschaft | FibroGen vs. Genworth Financial | FibroGen vs. Verizon Communications | FibroGen vs. Grupo Sports World |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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