Correlation Between PUDO and FedEx
Can any of the company-specific risk be diversified away by investing in both PUDO and FedEx 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 PUDO and FedEx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUDO Inc and FedEx, you can compare the effects of market volatilities on PUDO and FedEx 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 PUDO with a short position of FedEx. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUDO and FedEx.
Diversification Opportunities for PUDO and FedEx
Very weak diversification
The 3 months correlation between PUDO and FedEx is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PUDO Inc and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and PUDO 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 PUDO Inc are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of PUDO i.e., PUDO and FedEx go up and down completely randomly.
Pair Corralation between PUDO and FedEx
Assuming the 90 days horizon PUDO Inc is expected to generate 27.45 times more return on investment than FedEx. However, PUDO is 27.45 times more volatile than FedEx. It trades about 0.27 of its potential returns per unit of risk. FedEx is currently generating about 0.36 per unit of risk. If you would invest 15.00 in PUDO Inc on September 4, 2024 and sell it today you would earn a total of 22.00 from holding PUDO Inc or generate 146.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
PUDO Inc vs. FedEx
Performance |
| Timeline |
| PUDO Inc |
| FedEx |
PUDO and FedEx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUDO and FedEx
The main advantage of trading using opposite PUDO and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUDO position performs unexpectedly, FedEx 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 FedEx will offset losses from the drop in FedEx's long position.| PUDO vs. TOMI Environmental Solutions | PUDO vs. SCOR PK | PUDO vs. HUMANA INC | PUDO vs. Aquagold International |
| FedEx vs. GXO Logistics | FedEx vs. JB Hunt Transport | FedEx vs. Expeditors International of | FedEx vs. CH Robinson Worldwide |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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