Correlation Between GXO Logistics and Beauty Health
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Beauty Health 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 Beauty Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and Beauty Health Co, you can compare the effects of market volatilities on GXO Logistics and Beauty Health 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 Beauty Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Beauty Health.
Diversification Opportunities for GXO Logistics and Beauty Health
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GXO and Beauty is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Beauty Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beauty Health 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 Beauty Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beauty Health has no effect on the direction of GXO Logistics i.e., GXO Logistics and Beauty Health go up and down completely randomly.
Pair Corralation between GXO Logistics and Beauty Health
Considering the 90-day investment horizon GXO Logistics is expected to generate 0.37 times more return on investment than Beauty Health. However, GXO Logistics is 2.68 times less risky than Beauty Health. It trades about 0.04 of its potential returns per unit of risk. Beauty Health Co is currently generating about -0.16 per unit of risk. If you would invest 6,066 in GXO Logistics on August 28, 2024 and sell it today you would earn a total of 92.00 from holding GXO Logistics or generate 1.52% 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. Beauty Health Co
Performance |
| Timeline |
| GXO Logistics |
| Beauty Health |
GXO Logistics and Beauty Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and Beauty Health
The main advantage of trading using opposite GXO Logistics and Beauty Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Beauty Health 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 Beauty Health will offset losses from the drop in Beauty Health'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 |
| Beauty Health vs. Honest Company | Beauty Health vs. Hims Hers Health | Beauty Health vs. Procter Gamble | Beauty Health vs. Kimberly Clark |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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