Correlation Between PS International and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both PS International 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 PS International and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PS International Group and GXO Logistics, you can compare the effects of market volatilities on PS International 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 PS International with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PS International and GXO Logistics.
Diversification Opportunities for PS International and GXO Logistics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PSIG and GXO is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PS International Group and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and PS International 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 PS International Group 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 PS International i.e., PS International and GXO Logistics go up and down completely randomly.
Pair Corralation between PS International and GXO Logistics
Given the investment horizon of 90 days PS International Group is expected to under-perform the GXO Logistics. In addition to that, PS International is 1.89 times more volatile than GXO Logistics. It trades about -0.42 of its total potential returns per unit of risk. GXO Logistics is currently generating about 0.0 per unit of volatility. If you would invest 6,066 in GXO Logistics on August 27, 2024 and sell it today you would lose (19.00) from holding GXO Logistics or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PS International Group vs. GXO Logistics
Performance |
| Timeline |
| PS International |
| GXO Logistics |
PS International and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PS International and GXO Logistics
The main advantage of trading using opposite PS International and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PS International 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.| PS International vs. Alliant Energy Corp | PS International vs. Mediag3 | PS International vs. Xponential Fitness | PS International vs. PGE Corp |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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