Correlation Between GXO Logistics and Hub
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Hub 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 Hub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and Hub Group, you can compare the effects of market volatilities on GXO Logistics and Hub 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 Hub. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Hub.
Diversification Opportunities for GXO Logistics and Hub
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GXO and Hub is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Hub Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Group 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 Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Group has no effect on the direction of GXO Logistics i.e., GXO Logistics and Hub go up and down completely randomly.
Pair Corralation between GXO Logistics and Hub
Considering the 90-day investment horizon GXO Logistics is expected to generate 10.55 times less return on investment than Hub. But when comparing it to its historical volatility, GXO Logistics is 1.18 times less risky than Hub. It trades about 0.04 of its potential returns per unit of risk. Hub Group is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 4,369 in Hub Group on August 28, 2024 and sell it today you would earn a total of 951.00 from holding Hub Group or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GXO Logistics vs. Hub Group
Performance |
| Timeline |
| GXO Logistics |
| Hub Group |
GXO Logistics and Hub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and Hub
The main advantage of trading using opposite GXO Logistics and Hub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Hub 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 Hub will offset losses from the drop in Hub'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 |
| Hub vs. Landstar System | Hub vs. JB Hunt Transport | Hub vs. Expeditors International of | Hub vs. CH Robinson Worldwide |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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