Correlation Between Lakeside Holding and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both Lakeside Holding and GXO Logistics 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 Lakeside Holding and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeside Holding Limited and GXO Logistics, you can compare the effects of market volatilities on Lakeside Holding and GXO Logistics 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 Lakeside Holding with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeside Holding and GXO Logistics.
Diversification Opportunities for Lakeside Holding and GXO Logistics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lakeside and GXO is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lakeside Holding Limited and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and Lakeside Holding 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 Lakeside Holding Limited are associated (or correlated) with GXO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GXO Logistics has no effect on the direction of Lakeside Holding i.e., Lakeside Holding and GXO Logistics go up and down completely randomly.
Pair Corralation between Lakeside Holding and GXO Logistics
Considering the 90-day investment horizon Lakeside Holding Limited is expected to generate 2.38 times more return on investment than GXO Logistics. However, Lakeside Holding is 2.38 times more volatile than GXO Logistics. It trades about -0.1 of its potential returns per unit of risk. GXO Logistics is currently generating about -0.27 per unit of risk. If you would invest 294.00 in Lakeside Holding Limited on October 26, 2024 and sell it today you would lose (87.00) from holding Lakeside Holding Limited or give up 29.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakeside Holding Limited vs. GXO Logistics
Performance |
| Timeline |
| Lakeside Holding |
| GXO Logistics |
Lakeside Holding and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeside Holding and GXO Logistics
The main advantage of trading using opposite Lakeside Holding and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeside Holding position performs unexpectedly, GXO Logistics 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 GXO Logistics will offset losses from the drop in GXO Logistics' long position.| Lakeside Holding vs. Vishay Intertechnology | Lakeside Holding vs. Universal Music Group | Lakeside Holding vs. KLA Tencor | Lakeside Holding vs. BW Offshore Limited |
| GXO Logistics vs. Forward Air | GXO Logistics vs. Landstar System | GXO Logistics vs. JB Hunt Transport | GXO Logistics vs. Expeditors International of |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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