Correlation Between Freightos Limited and Pitney Bowes

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

Diversification Opportunities for Freightos Limited and Pitney Bowes

0.36

Correlation Coefficient

Freightos Limited  Pitney Bowes

Weak diversification

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

Pair Corralation between Freightos Limited and Pitney Bowes

Given the investment horizon of 90 days Freightos Limited is expected to generate 2.36 times less return on investment than Pitney Bowes. In addition to that, Freightos Limited is 1.62 times more volatile than Pitney Bowes. It trades about 0.02 of its total potential returns per unit of risk. Pitney Bowes is currently generating about 0.09 per unit of volatility. If you would invest  410.00  in Pitney Bowes on October 6, 2024 and sell it today you would earn a total of  323.00  from holding Pitney Bowes or generate 78.78% return on investment over 90 days.

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

Freightos Limited Ordinary  vs.  Pitney Bowes

Freightos Limited

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freightos Limited Ordinary are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Freightos Limited displayed solid returns over the last few months and may actually be approaching a breakup point.

Pitney Bowes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pitney Bowes are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Pitney Bowes may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Freightos Limited and Pitney Bowes

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

The idea behind Freightos Limited Ordinary and Pitney Bowes 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 CEOs Directory module to screen CEOs from public companies around the world.