Correlation Between Clear Secure and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both Clear Secure 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 Clear Secure and GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clear Secure and GXO Logistics, you can compare the effects of market volatilities on Clear Secure 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 Clear Secure with a short position of GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Secure and GXO Logistics.
Diversification Opportunities for Clear Secure and GXO Logistics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clear and GXO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Clear Secure and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and Clear Secure 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 Clear Secure 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 Clear Secure i.e., Clear Secure and GXO Logistics go up and down completely randomly.
Pair Corralation between Clear Secure and GXO Logistics
Considering the 90-day investment horizon Clear Secure is expected to under-perform the GXO Logistics. In addition to that, Clear Secure is 3.05 times more volatile than GXO Logistics. It trades about -0.19 of its total potential returns per unit of risk. GXO Logistics is currently generating about -0.04 per unit of volatility. If you would invest 6,147 in GXO Logistics on August 24, 2024 and sell it today you would lose (147.00) from holding GXO Logistics or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clear Secure vs. GXO Logistics
Performance |
| Timeline |
| Clear Secure |
| GXO Logistics |
Clear Secure and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clear Secure and GXO Logistics
The main advantage of trading using opposite Clear Secure and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clear Secure 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.| Clear Secure vs. Braze Inc | Clear Secure vs. Enfusion | Clear Secure vs. Freshworks | Clear Secure vs. Clearwater Analytics Holdings |
| GXO Logistics vs. Forward Air | GXO Logistics vs. Landstar System | GXO Logistics vs. JB Hunt Transport | GXO Logistics vs. Expeditors International of |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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