Correlation Between Freightos Limited and United Parcel
Can any of the company-specific risk be diversified away by investing in both Freightos Limited and United Parcel 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 Freightos Limited and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freightos Limited Warrants and United Parcel Service, you can compare the effects of market volatilities on Freightos Limited and United Parcel 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 Freightos Limited with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freightos Limited and United Parcel.
Diversification Opportunities for Freightos Limited and United Parcel
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Freightos and United is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Freightos Limited Warrants and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service and Freightos Limited 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 Freightos Limited Warrants are associated (or correlated) with United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Freightos Limited i.e., Freightos Limited and United Parcel go up and down completely randomly.
Pair Corralation between Freightos Limited and United Parcel
Assuming the 90 days horizon Freightos Limited Warrants is expected to generate 16.98 times more return on investment than United Parcel. However, Freightos Limited is 16.98 times more volatile than United Parcel Service. It trades about 0.2 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.02 per unit of risk. If you would invest 8.09 in Freightos Limited Warrants on January 28, 2024 and sell it today you would earn a total of 3.91 from holding Freightos Limited Warrants or generate 48.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 71.43% |
Values | Daily Returns |
Freightos Limited Warrants vs. United Parcel Service
Performance |
Timeline |
Freightos Limited |
United Parcel Service |
Freightos Limited and United Parcel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Freightos Limited and United Parcel
The main advantage of trading using opposite Freightos Limited and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freightos Limited position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.Freightos Limited vs. Hub Group | Freightos Limited vs. JB Hunt Transport | Freightos Limited vs. Expeditors International of | Freightos Limited vs. CH Robinson Worldwide |
United Parcel vs. CH Robinson Worldwide | United Parcel vs. Hub Group | United Parcel vs. Landstar System | United Parcel 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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