Correlation Between FedEx Corp and FedEx

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

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

Diversification Opportunities for FedEx Corp and FedEx

0.97

Correlation Coefficient

FedEx Corp  FedEx

Almost no diversification

The 3 months correlation between FedEx and FedEx is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding FedEx Corp and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and FedEx Corp 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 FedEx Corp are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of FedEx Corp i.e., FedEx Corp and FedEx go up and down completely randomly.

Pair Corralation between FedEx Corp and FedEx

Assuming the 90 days trading horizon FedEx Corp is expected to generate 1.17 times less return on investment than FedEx. But when comparing it to its historical volatility, FedEx Corp is 1.09 times less risky than FedEx. It trades about 0.09 of its potential returns per unit of risk. FedEx is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  24,615  in FedEx on October 22, 2024 and sell it today you would earn a total of  2,280  from holding FedEx or generate 9.26% return on investment over 90 days.

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

FedEx Corp  vs.  FedEx

FedEx Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, FedEx Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FedEx

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FedEx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FedEx Corp and FedEx

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

The idea behind FedEx Corp and FedEx 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.