Correlation Between FEDEX and BBB Foods
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By analyzing existing cross correlation between FEDEX P and BBB Foods, you can compare the effects of market volatilities on FEDEX and BBB Foods 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 FEDEX with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEDEX and BBB Foods.
Diversification Opportunities for FEDEX and BBB Foods
Average diversification
The 3 months correlation between FEDEX and BBB is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FEDEX P and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods and FEDEX 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 FEDEX P are associated (or correlated) with BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of FEDEX i.e., FEDEX and BBB Foods go up and down completely randomly.
Pair Corralation between FEDEX and BBB Foods
Assuming the 90 days trading horizon FEDEX P is expected to generate 0.51 times more return on investment than BBB Foods. However, FEDEX P is 1.97 times less risky than BBB Foods. It trades about 0.08 of its potential returns per unit of risk. BBB Foods is currently generating about -0.12 per unit of risk. If you would invest 9,297 in FEDEX P on September 12, 2024 and sell it today you would earn a total of 244.00 from holding FEDEX P or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FEDEX P vs. BBB Foods
Performance |
| Timeline |
| FEDEX P |
| BBB Foods |
FEDEX and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEDEX and BBB Foods
The main advantage of trading using opposite FEDEX and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEDEX position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| FEDEX vs. The Gap, | FEDEX vs. Hudson Pacific Properties | FEDEX vs. JJill Inc | FEDEX vs. Haverty Furniture Companies |
| BBB Foods vs. Costco Wholesale Corp | BBB Foods vs. BJs Wholesale Club | BBB Foods vs. Dollar Tree | BBB Foods vs. Dollar General |
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 CEOs Directory module to screen CEOs from public companies around the world.
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