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

0.96

Correlation Coefficient

FedEx Corp  FedEx

Almost no diversification

The 3 months correlation between FedEx and FedEx is 0.96. 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 under-perform the FedEx. But the stock apears to be less risky and, when comparing its historical volatility, FedEx Corp is 1.12 times less risky than FedEx. The stock trades about -0.15 of its potential returns per unit of risk. The FedEx is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  25,742  in FedEx on December 21, 2024 and sell it today you would lose (3,112) from holding FedEx or give up 12.09% of portfolio value 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

Very Weak

Over the last 90 days FedEx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FedEx

Risk-Adjusted Performance

Very Weak

Over the last 90 days FedEx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.