Correlation Between Landstar System and Shengfeng Development
Can any of the company-specific risk be diversified away by investing in both Landstar System and Shengfeng Development 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 Landstar System and Shengfeng Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Landstar System and Shengfeng Development Limited, you can compare the effects of market volatilities on Landstar System and Shengfeng Development 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 Landstar System with a short position of Shengfeng Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landstar System and Shengfeng Development.
Diversification Opportunities for Landstar System and Shengfeng Development
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Landstar and Shengfeng is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Landstar System and Shengfeng Development Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengfeng Development and Landstar System 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 Landstar System are associated (or correlated) with Shengfeng Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengfeng Development has no effect on the direction of Landstar System i.e., Landstar System and Shengfeng Development go up and down completely randomly.
Pair Corralation between Landstar System and Shengfeng Development
Given the investment horizon of 90 days Landstar System is expected to under-perform the Shengfeng Development. But the stock apears to be less risky and, when comparing its historical volatility, Landstar System is 6.78 times less risky than Shengfeng Development. The stock trades about 0.0 of its potential returns per unit of risk. The Shengfeng Development Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Shengfeng Development Limited on November 5, 2024 and sell it today you would lose (304.00) from holding Shengfeng Development Limited or give up 76.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.72% |
| Values | Daily Returns |
Landstar System vs. Shengfeng Development Limited
Performance |
| Timeline |
| Landstar System |
| Shengfeng Development |
Landstar System and Shengfeng Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landstar System and Shengfeng Development
The main advantage of trading using opposite Landstar System and Shengfeng Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landstar System position performs unexpectedly, Shengfeng Development 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 Shengfeng Development will offset losses from the drop in Shengfeng Development's long position.| Landstar System vs. Hub Group | Landstar System vs. JB Hunt Transport | Landstar System vs. Expeditors International of | Landstar System vs. CH Robinson Worldwide |
| Shengfeng Development vs. Jayud Global Logistics | Shengfeng Development vs. Freightos Limited Ordinary | Shengfeng Development vs. Air T Inc | Shengfeng Development vs. Forward Air |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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