Correlation Between US Xpress and RXO
Can any of the company-specific risk be diversified away by investing in both US Xpress and RXO 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 US Xpress and RXO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Xpress Enterprises and RXO Inc, you can compare the effects of market volatilities on US Xpress and RXO 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 US Xpress with a short position of RXO. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Xpress and RXO.
Diversification Opportunities for US Xpress and RXO
Very weak diversification
The 3 months correlation between USX and RXO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding US Xpress Enterprises and RXO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RXO Inc and US Xpress 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 US Xpress Enterprises are associated (or correlated) with RXO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RXO Inc has no effect on the direction of US Xpress i.e., US Xpress and RXO go up and down completely randomly.
Pair Corralation between US Xpress and RXO
If you would invest 2,793 in RXO Inc on September 2, 2024 and sell it today you would earn a total of 222.00 from holding RXO Inc or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
US Xpress Enterprises vs. RXO Inc
Performance |
| Timeline |
| US Xpress Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RXO Inc |
US Xpress and RXO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Xpress and RXO
The main advantage of trading using opposite US Xpress and RXO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Xpress position performs unexpectedly, RXO 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 RXO will offset losses from the drop in RXO's long position.| US Xpress vs. Heartland Express | US Xpress vs. Universal Logistics Holdings | US Xpress vs. Marten Transport | US Xpress vs. Werner Enterprises |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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