Correlation Between Royal Mail and Shengfeng Development
Can any of the company-specific risk be diversified away by investing in both Royal Mail 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 Royal Mail and Shengfeng Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Mail Plc and Shengfeng Development Limited, you can compare the effects of market volatilities on Royal Mail 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 Royal Mail with a short position of Shengfeng Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Mail and Shengfeng Development.
Diversification Opportunities for Royal Mail and Shengfeng Development
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Royal and Shengfeng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Royal Mail Plc and Shengfeng Development Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengfeng Development and Royal Mail 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 Royal Mail Plc 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 Royal Mail i.e., Royal Mail and Shengfeng Development go up and down completely randomly.
Pair Corralation between Royal Mail and Shengfeng Development
Assuming the 90 days horizon Royal Mail Plc is expected to generate 0.34 times more return on investment than Shengfeng Development. However, Royal Mail Plc is 2.93 times less risky than Shengfeng Development. It trades about 0.07 of its potential returns per unit of risk. Shengfeng Development Limited is currently generating about 0.01 per unit of risk. If you would invest 279.00 in Royal Mail Plc on November 5, 2024 and sell it today you would earn a total of 105.00 from holding Royal Mail Plc or generate 37.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 39.09% |
| Values | Daily Returns |
Royal Mail Plc vs. Shengfeng Development Limited
Performance |
| Timeline |
| Royal Mail Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shengfeng Development |
Royal Mail and Shengfeng Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Mail and Shengfeng Development
The main advantage of trading using opposite Royal Mail and Shengfeng Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Mail 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.| Royal Mail vs. Freightos Limited Ordinary | Royal Mail vs. Addentax Group Corp | Royal Mail vs. United Parcel Service | Royal Mail vs. GXO Logistics |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |