Correlation Between FedEx and CH Robinson
Can any of the company-specific risk be diversified away by investing in both FedEx and CH Robinson 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 CH Robinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedEx and CH Robinson Worldwide, you can compare the effects of market volatilities on FedEx and CH Robinson 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 CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedEx and CH Robinson.
Diversification Opportunities for FedEx and CH Robinson
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FedEx and CHRW is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding FedEx and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide 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 CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of FedEx i.e., FedEx and CH Robinson go up and down completely randomly.
Pair Corralation between FedEx and CH Robinson
Considering the 90-day investment horizon FedEx is expected to generate 0.65 times more return on investment than CH Robinson. However, FedEx is 1.55 times less risky than CH Robinson. It trades about 0.44 of its potential returns per unit of risk. CH Robinson Worldwide is currently generating about -0.03 per unit of risk. If you would invest 27,545 in FedEx on August 28, 2024 and sell it today you would earn a total of 2,970 from holding FedEx or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FedEx vs. CH Robinson Worldwide
Performance |
| Timeline |
| FedEx |
| CH Robinson Worldwide |
FedEx and CH Robinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedEx and CH Robinson
The main advantage of trading using opposite FedEx and CH Robinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedEx position performs unexpectedly, CH Robinson 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 CH Robinson will offset losses from the drop in CH Robinson's long position.| FedEx vs. GXO Logistics | FedEx vs. JB Hunt Transport | FedEx vs. Expeditors International of | FedEx vs. CH Robinson Worldwide |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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