Correlation Between GXO Logistics and Open Lending
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Open Lending 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 Open Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and Open Lending Corp, you can compare the effects of market volatilities on GXO Logistics and Open Lending 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 Open Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Open Lending.
Diversification Opportunities for GXO Logistics and Open Lending
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GXO and Open is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Open Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Lending 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 Open Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Lending Corp has no effect on the direction of GXO Logistics i.e., GXO Logistics and Open Lending go up and down completely randomly.
Pair Corralation between GXO Logistics and Open Lending
Considering the 90-day investment horizon GXO Logistics is expected to under-perform the Open Lending. But the stock apears to be less risky and, when comparing its historical volatility, GXO Logistics is 2.17 times less risky than Open Lending. The stock trades about -0.04 of its potential returns per unit of risk. The Open Lending Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Open Lending Corp on August 24, 2024 and sell it today you would earn a total of 76.00 from holding Open Lending Corp or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GXO Logistics vs. Open Lending Corp
Performance |
| Timeline |
| GXO Logistics |
| Open Lending Corp |
GXO Logistics and Open Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and Open Lending
The main advantage of trading using opposite GXO Logistics and Open Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Open Lending 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 Open Lending will offset losses from the drop in Open Lending'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 |
| Open Lending vs. EZCORP Inc | Open Lending vs. Orix Corp Ads | Open Lending vs. SLM Corp | Open Lending vs. Navient Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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