Correlation Between Expeditors International and Freightos Limited

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

Diversification Opportunities for Expeditors International and Freightos Limited

-0.23

Correlation Coefficient

Expeditors International  Freightos Limited

Very good diversification

The 3 months correlation between Expeditors and Freightos is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and Freightos Limited Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightos Limited 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 Freightos Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightos Limited has no effect on the direction of Expeditors International i.e., Expeditors International and Freightos Limited go up and down completely randomly.

Pair Corralation between Expeditors International and Freightos Limited

Given the investment horizon of 90 days Expeditors International of is expected to under-perform the Freightos Limited. But the stock apears to be less risky and, when comparing its historical volatility, Expeditors International of is 16.03 times less risky than Freightos Limited. The stock trades about -0.24 of its potential returns per unit of risk. The Freightos Limited Warrants is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  8.45  in Freightos Limited Warrants on October 6, 2024 and sell it today you would earn a total of  9.55  from holding Freightos Limited Warrants or generate 113.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.54%
Values	Daily Returns

Expeditors International of  vs.  Freightos Limited Warrants

Expeditors International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expeditors International of 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 sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Freightos Limited

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freightos Limited Warrants are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Freightos Limited showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expeditors International and Freightos Limited

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

The idea behind Expeditors International of and Freightos Limited Warrants 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.