Correlation Between FedEx and Sequoia Logstica

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

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

Diversification Opportunities for FedEx and Sequoia Logstica

-0.54

Correlation Coefficient

FedEx  Sequoia Logstica

Excellent diversification

The 3 months correlation between FedEx and Sequoia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FedEx and Sequoia Logstica e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequoia Logstica e and FedEx 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 are associated (or correlated) with Sequoia Logstica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequoia Logstica e has no effect on the direction of FedEx i.e., FedEx and Sequoia Logstica go up and down completely randomly.

Pair Corralation between FedEx and Sequoia Logstica

Assuming the 90 days trading horizon FedEx is expected to generate 0.2 times more return on investment than Sequoia Logstica. However, FedEx is 5.12 times less risky than Sequoia Logstica. It trades about 0.09 of its potential returns per unit of risk. Sequoia Logstica e is currently generating about 0.02 per unit of risk. If you would invest  153,497  in FedEx on October 20, 2024 and sell it today you would earn a total of  12,371  from holding FedEx or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

FedEx  vs.  Sequoia Logstica e

FedEx

Risk-Adjusted Performance

7 of 100

OK

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 somewhat uncertain basic indicators, FedEx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sequoia Logstica e

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sequoia Logstica e are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sequoia Logstica may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FedEx and Sequoia Logstica

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

The idea behind FedEx and Sequoia Logstica e 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.