Correlation Between Shengfeng Development and FedEx
Can any of the company-specific risk be diversified away by investing in both Shengfeng Development 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 Shengfeng Development and FedEx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shengfeng Development Limited and FedEx, you can compare the effects of market volatilities on Shengfeng Development 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 Shengfeng Development with a short position of FedEx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengfeng Development and FedEx.
Diversification Opportunities for Shengfeng Development and FedEx
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shengfeng and FedEx is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shengfeng Development Limited and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and Shengfeng Development 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 Shengfeng Development Limited 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 Shengfeng Development i.e., Shengfeng Development and FedEx go up and down completely randomly.
Pair Corralation between Shengfeng Development and FedEx
Given the investment horizon of 90 days Shengfeng Development Limited is expected to under-perform the FedEx. In addition to that, Shengfeng Development is 3.51 times more volatile than FedEx. It trades about -0.22 of its total potential returns per unit of risk. FedEx is currently generating about 0.44 per unit of volatility. If you would invest 27,545 in FedEx on August 27, 2024 and sell it today you would earn a total of 2,970 from holding FedEx or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengfeng Development Limited vs. FedEx
Performance |
| Timeline |
| Shengfeng Development |
| FedEx |
Shengfeng Development and FedEx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengfeng Development and FedEx
The main advantage of trading using opposite Shengfeng Development and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengfeng Development 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.| Shengfeng Development vs. Jayud Global Logistics | Shengfeng Development vs. Freightos Limited Ordinary | Shengfeng Development vs. Air T Inc | Shengfeng Development vs. Forward Air |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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