Correlation Between Freightos Limited and DSV Panalpina

Can any of the company-specific risk be diversified away by investing in both Freightos Limited and DSV Panalpina 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 DSV Panalpina 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 DSV Panalpina AS, you can compare the effects of market volatilities on Freightos Limited and DSV Panalpina 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 DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freightos Limited and DSV Panalpina.

Diversification Opportunities for Freightos Limited and DSV Panalpina

-0.41

Correlation Coefficient

Freightos Limited  DSV Panalpina

Very good diversification

The 3 months correlation between Freightos and DSV is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Freightos Limited Ordinary and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS 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 DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Freightos Limited i.e., Freightos Limited and DSV Panalpina go up and down completely randomly.

Pair Corralation between Freightos Limited and DSV Panalpina

Given the investment horizon of 90 days Freightos Limited Ordinary is expected to under-perform the DSV Panalpina. In addition to that, Freightos Limited is 3.43 times more volatile than DSV Panalpina AS. It trades about -0.03 of its total potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.07 per unit of volatility. If you would invest  10,590  in DSV Panalpina AS on December 29, 2024 and sell it today you would lose (814.00) from holding DSV Panalpina AS or give up 7.69% of portfolio value over 90 days.

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

Freightos Limited Ordinary  vs.  DSV Panalpina AS

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.

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Freightos Limited and DSV Panalpina

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

The idea behind Freightos Limited Ordinary and DSV Panalpina AS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.