Correlation Between GXO Logistics and Jayud Global

Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Jayud Global 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 GXO Logistics and Jayud Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GXO Logistics and Jayud Global Logistics, you can compare the effects of market volatilities on GXO Logistics and Jayud Global 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 GXO Logistics with a short position of Jayud Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Jayud Global.

Diversification Opportunities for GXO Logistics and Jayud Global

0.36

Correlation Coefficient

GXO Logistics  Jayud Global

Weak diversification

The 3 months correlation between GXO and Jayud is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Jayud Global Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jayud Global Logistics and GXO Logistics 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 GXO Logistics are associated (or correlated) with Jayud Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jayud Global Logistics has no effect on the direction of GXO Logistics i.e., GXO Logistics and Jayud Global go up and down completely randomly.

Pair Corralation between GXO Logistics and Jayud Global

Considering the 90-day investment horizon GXO Logistics is expected to generate 0.42 times more return on investment than Jayud Global. However, GXO Logistics is 2.39 times less risky than Jayud Global. It trades about -0.07 of its potential returns per unit of risk. Jayud Global Logistics is currently generating about -0.15 per unit of risk. If you would invest  5,376  in GXO Logistics on March 28, 2024 and sell it today you would lose (487.00) from holding GXO Logistics or give up 9.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GXO Logistics  vs.  Jayud Global Logistics

GXO Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GXO Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Jayud Global Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jayud Global Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with GXO Logistics and Jayud Global

The main advantage of trading using opposite GXO Logistics and Jayud Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Jayud Global 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 Jayud Global will offset losses from the drop in Jayud Global's long position.

The idea behind GXO Logistics and Jayud Global Logistics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.