Correlation Between DevEx Resources and FedEx

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

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

Diversification Opportunities for DevEx Resources and FedEx

-0.67

Correlation Coefficient

DevEx Resources  FedEx

Excellent diversification

The 3 months correlation between DevEx and FedEx is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and DevEx Resources 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 DevEx Resources Limited 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 DevEx Resources i.e., DevEx Resources and FedEx go up and down completely randomly.

Pair Corralation between DevEx Resources and FedEx

Assuming the 90 days horizon DevEx Resources Limited is expected to under-perform the FedEx. In addition to that, DevEx Resources is 4.32 times more volatile than FedEx. It trades about 0.0 of its total potential returns per unit of risk. FedEx is currently generating about 0.09 per unit of volatility. If you would invest  24,148  in FedEx on October 10, 2024 and sell it today you would earn a total of  2,477  from holding FedEx or generate 10.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	88.14%
Values	Daily Returns

DevEx Resources Limited  vs.  FedEx

DevEx Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DevEx Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DevEx Resources is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

FedEx

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, FedEx unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DevEx Resources and FedEx

The main advantage of trading using opposite DevEx Resources and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DevEx Resources 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 DevEx Resources Limited 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.