Correlation Between GXO Logistics and United Parcel
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and United Parcel 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 United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and United Parcel Service, you can compare the effects of market volatilities on GXO Logistics and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and United Parcel.
Diversification Opportunities for GXO Logistics and United Parcel
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GXO and United is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of GXO Logistics i.e., GXO Logistics and United Parcel go up and down completely randomly.
Pair Corralation between GXO Logistics and United Parcel
Considering the 90-day investment horizon GXO Logistics is expected to generate 1.55 times less return on investment than United Parcel. In addition to that, GXO Logistics is 1.65 times more volatile than United Parcel Service. It trades about 0.04 of its total potential returns per unit of risk. United Parcel Service is currently generating about 0.11 per unit of volatility. If you would invest 13,369 in United Parcel Service on August 28, 2024 and sell it today you would earn a total of 385.00 from holding United Parcel Service or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GXO Logistics vs. United Parcel Service
Performance |
| Timeline |
| GXO Logistics |
| United Parcel Service |
GXO Logistics and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXO Logistics and United Parcel
The main advantage of trading using opposite GXO Logistics and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel'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 |
| United Parcel vs. Expeditors International of | United Parcel vs. Aquagold International | United Parcel vs. Morningstar Unconstrained Allocation | United Parcel vs. Thrivent High Yield |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |