Correlation Between QUEEN S and FedEx

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

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

Diversification Opportunities for QUEEN S and FedEx

0.07

Correlation Coefficient

QUEEN S  FedEx

Significant diversification

The 3 months correlation between QUEEN and FedEx is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of QUEEN S i.e., QUEEN S and FedEx go up and down completely randomly.

Pair Corralation between QUEEN S and FedEx

Assuming the 90 days horizon QUEEN S ROAD is expected to generate 2.13 times more return on investment than FedEx. However, QUEEN S is 2.13 times more volatile than FedEx. It trades about -0.06 of its potential returns per unit of risk. FedEx is currently generating about -0.15 per unit of risk. If you would invest  464.00  in QUEEN S ROAD on October 26, 2024 and sell it today you would lose (12.00) from holding QUEEN S ROAD or give up 2.59% of portfolio value over 90 days.

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

QUEEN S ROAD  vs.  FedEx

QUEEN S ROAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QUEEN S ROAD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FedEx

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FedEx is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with QUEEN S and FedEx

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

The idea behind QUEEN S ROAD and FedEx 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.