Correlation Between Freightos Limited and Deutsche Post

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

By analyzing existing cross correlation between Freightos Limited Ordinary and Deutsche Post AG, you can compare the effects of market volatilities on Freightos Limited and Deutsche Post 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 Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freightos Limited and Deutsche Post.

Diversification Opportunities for Freightos Limited and Deutsche Post

-0.75

Correlation Coefficient

Freightos Limited  Deutsche Post

Pay attention - limited upside

The 3 months correlation between Freightos and Deutsche is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Freightos Limited Ordinary and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG 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 Ordinary are associated (or correlated) with Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of Freightos Limited i.e., Freightos Limited and Deutsche Post go up and down completely randomly.

Pair Corralation between Freightos Limited and Deutsche Post

Given the investment horizon of 90 days Freightos Limited Ordinary is expected to under-perform the Deutsche Post. In addition to that, Freightos Limited is 2.43 times more volatile than Deutsche Post AG. It trades about -0.03 of its total potential returns per unit of risk. Deutsche Post AG is currently generating about 0.15 per unit of volatility. If you would invest  3,550  in Deutsche Post AG on December 30, 2024 and sell it today you would earn a total of  821.00  from holding Deutsche Post AG or generate 23.13% return on investment over 90 days.

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

Freightos Limited Ordinary  vs.  Deutsche Post AG

Freightos Limited

Risk-Adjusted Performance

Very Weak

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

Deutsche Post AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Post AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Deutsche Post reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freightos Limited and Deutsche Post

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

The idea behind Freightos Limited Ordinary and Deutsche Post AG 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.