Correlation Between Globavend Holdings and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both Globavend Holdings and GXO Logistics 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 Globavend Holdings and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globavend Holdings Limited and GXO Logistics, you can compare the effects of market volatilities on Globavend Holdings and GXO Logistics 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 Globavend Holdings with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globavend Holdings and GXO Logistics.
Diversification Opportunities for Globavend Holdings and GXO Logistics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globavend and GXO is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Globavend Holdings Limited and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and Globavend Holdings 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 Globavend Holdings Limited are associated (or correlated) with GXO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GXO Logistics has no effect on the direction of Globavend Holdings i.e., Globavend Holdings and GXO Logistics go up and down completely randomly.
Pair Corralation between Globavend Holdings and GXO Logistics
Considering the 90-day investment horizon Globavend Holdings Limited is expected to under-perform the GXO Logistics. In addition to that, Globavend Holdings is 3.68 times more volatile than GXO Logistics. It trades about -0.02 of its total potential returns per unit of risk. GXO Logistics is currently generating about -0.01 per unit of volatility. If you would invest 5,483 in GXO Logistics on October 25, 2024 and sell it today you would lose (974.00) from holding GXO Logistics or give up 17.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 61.05% |
| Values | Daily Returns |
Globavend Holdings Limited vs. GXO Logistics
Performance |
| Timeline |
| Globavend Holdings |
| GXO Logistics |
Globavend Holdings and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globavend Holdings and GXO Logistics
The main advantage of trading using opposite Globavend Holdings and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globavend Holdings position performs unexpectedly, GXO Logistics 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 GXO Logistics will offset losses from the drop in GXO Logistics' long position.| Globavend Holdings vs. Hawkins | Globavend Holdings vs. Braskem SA Class | Globavend Holdings vs. Starwin Media Holdings | Globavend Holdings vs. Emerson Radio |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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