Correlation Between FedEx and Royal Mail
Can any of the company-specific risk be diversified away by investing in both FedEx 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 FedEx and Royal Mail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedEx and Royal Mail PLC, you can compare the effects of market volatilities on FedEx 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 FedEx with a short position of Royal Mail. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedEx and Royal Mail.
Diversification Opportunities for FedEx and Royal Mail
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FedEx and Royal is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding FedEx 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 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 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 FedEx i.e., FedEx and Royal Mail go up and down completely randomly.
Pair Corralation between FedEx and Royal Mail
Considering the 90-day investment horizon FedEx is expected to generate 1.82 times less return on investment than Royal Mail. But when comparing it to its historical volatility, FedEx is 1.2 times less risky than Royal Mail. It trades about 0.04 of its potential returns per unit of risk. Royal Mail PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 616.00 in Royal Mail PLC on August 24, 2024 and sell it today you would earn a total of 248.00 from holding Royal Mail PLC or generate 40.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
FedEx vs. Royal Mail PLC
Performance |
| Timeline |
| FedEx |
| Royal Mail PLC |
FedEx and Royal Mail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedEx and Royal Mail
The main advantage of trading using opposite FedEx and Royal Mail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedEx 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.| FedEx vs. GXO Logistics | FedEx vs. JB Hunt Transport | FedEx vs. Expeditors International of | FedEx vs. CH Robinson Worldwide |
| Royal Mail vs. Kuehne Nagel International | Royal Mail vs. Kuehne Nagel International | Royal Mail vs. DSV Panalpina AS | Royal Mail vs. DSV Panalpina AS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |