Correlation Between GXO Logistics and PUDO
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and PUDO 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 PUDO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and PUDO Inc, you can compare the effects of market volatilities on GXO Logistics and PUDO 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 PUDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and PUDO.
Diversification Opportunities for GXO Logistics and PUDO
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GXO and PUDO is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and PUDO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUDO Inc 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 PUDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUDO Inc has no effect on the direction of GXO Logistics i.e., GXO Logistics and PUDO go up and down completely randomly.
Pair Corralation between GXO Logistics and PUDO
Considering the 90-day investment horizon GXO Logistics is expected to generate 116.92 times less return on investment than PUDO. But when comparing it to its historical volatility, GXO Logistics is 19.84 times less risky than PUDO. It trades about 0.02 of its potential returns per unit of risk. PUDO Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 62.00 in PUDO Inc on September 4, 2024 and sell it today you would lose (25.00) from holding PUDO Inc or give up 40.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
GXO Logistics vs. PUDO Inc
Performance |
| Timeline |
| GXO Logistics |
| PUDO Inc |
GXO Logistics and PUDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and PUDO
The main advantage of trading using opposite GXO Logistics and PUDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, PUDO 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 PUDO will offset losses from the drop in PUDO'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 |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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