Correlation Between Expeditors International and Bollor SE

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

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

Diversification Opportunities for Expeditors International and Bollor SE

0.28

Correlation Coefficient

Expeditors International  Bollor SE

Modest diversification

The 3 months correlation between Expeditors and Bollor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bollor SE and Expeditors International 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 Expeditors International of are associated (or correlated) with Bollor SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bollor SE has no effect on the direction of Expeditors International i.e., Expeditors International and Bollor SE go up and down completely randomly.

Pair Corralation between Expeditors International and Bollor SE

Assuming the 90 days horizon Expeditors International of is expected to generate 1.23 times more return on investment than Bollor SE. However, Expeditors International is 1.23 times more volatile than Bollor SE. It trades about 0.03 of its potential returns per unit of risk. Bollor SE is currently generating about -0.04 per unit of risk. If you would invest  10,440  in Expeditors International of on December 26, 2024 and sell it today you would earn a total of  250.00  from holding Expeditors International of or generate 2.39% return on investment over 90 days.

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

Expeditors International of  vs.  Bollor SE

Expeditors International

Risk-Adjusted Performance

Weak

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

Bollor SE

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Expeditors International and Bollor SE

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

The idea behind Expeditors International of and Bollor SE 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.