Correlation Between GXO Logistics and Addentax Group
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Addentax Group 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 GXO Logistics and Addentax Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and Addentax Group Corp, you can compare the effects of market volatilities on GXO Logistics and Addentax Group 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 GXO Logistics with a short position of Addentax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Addentax Group.
Diversification Opportunities for GXO Logistics and Addentax Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GXO and Addentax is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Addentax Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addentax Group Corp and GXO Logistics 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 GXO Logistics are associated (or correlated) with Addentax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addentax Group Corp has no effect on the direction of GXO Logistics i.e., GXO Logistics and Addentax Group go up and down completely randomly.
Pair Corralation between GXO Logistics and Addentax Group
Considering the 90-day investment horizon GXO Logistics is expected to generate 3.11 times less return on investment than Addentax Group. But when comparing it to its historical volatility, GXO Logistics is 4.12 times less risky than Addentax Group. It trades about 0.16 of its potential returns per unit of risk. Addentax Group Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Addentax Group Corp on October 26, 2024 and sell it today you would earn a total of 8.00 from holding Addentax Group Corp or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
GXO Logistics vs. Addentax Group Corp
Performance |
| Timeline |
| GXO Logistics |
| Addentax Group Corp |
GXO Logistics and Addentax Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and Addentax Group
The main advantage of trading using opposite GXO Logistics and Addentax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Addentax Group 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 Addentax Group will offset losses from the drop in Addentax Group's long position.| GXO Logistics vs. Forward Air | GXO Logistics vs. Landstar System | GXO Logistics vs. JB Hunt Transport | GXO Logistics vs. Expeditors International of |
| Addentax Group vs. Jayud Global Logistics | Addentax Group vs. Freightos Limited Ordinary | Addentax Group vs. Radiant Logistics | Addentax Group vs. JB Hunt Transport |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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