Correlation Between GXO Logistics and Lakeside Holding
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Lakeside Holding 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 Lakeside Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and Lakeside Holding Limited, you can compare the effects of market volatilities on GXO Logistics and Lakeside Holding 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 Lakeside Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Lakeside Holding.
Diversification Opportunities for GXO Logistics and Lakeside Holding
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GXO and Lakeside is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Lakeside Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeside Holding 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 Lakeside Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeside Holding has no effect on the direction of GXO Logistics i.e., GXO Logistics and Lakeside Holding go up and down completely randomly.
Pair Corralation between GXO Logistics and Lakeside Holding
Considering the 90-day investment horizon GXO Logistics is expected to generate 0.22 times more return on investment than Lakeside Holding. However, GXO Logistics is 4.59 times less risky than Lakeside Holding. It trades about 0.06 of its potential returns per unit of risk. Lakeside Holding Limited is currently generating about -0.18 per unit of risk. If you would invest 4,474 in GXO Logistics on November 5, 2024 and sell it today you would earn a total of 71.00 from holding GXO Logistics or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
GXO Logistics vs. Lakeside Holding Limited
Performance |
| Timeline |
| GXO Logistics |
| Lakeside Holding |
GXO Logistics and Lakeside Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and Lakeside Holding
The main advantage of trading using opposite GXO Logistics and Lakeside Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Lakeside Holding 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 Lakeside Holding will offset losses from the drop in Lakeside Holding'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 |
| Lakeside Holding vs. X FAB Silicon Foundries | Lakeside Holding vs. Q2 Holdings | Lakeside Holding vs. Luxfer Holdings PLC | Lakeside Holding vs. Where Food Comes |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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