Correlation Between GXO Logistics and Jayud Global

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

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

Diversification Opportunities for GXO Logistics and Jayud Global

-0.5

Correlation Coefficient

GXO Logistics  Jayud Global

Very good diversification

The 3 months correlation between GXO and Jayud is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Jayud Global Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jayud Global Logistics and GXO Logistics 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 GXO Logistics are associated (or correlated) with Jayud Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jayud Global Logistics has no effect on the direction of GXO Logistics i.e., GXO Logistics and Jayud Global go up and down completely randomly.

Pair Corralation between GXO Logistics and Jayud Global

Considering the 90-day investment horizon GXO Logistics is expected to under-perform the Jayud Global. But the stock apears to be less risky and, when comparing its historical volatility, GXO Logistics is 3.32 times less risky than Jayud Global. The stock trades about -0.01 of its potential returns per unit of risk. The Jayud Global Logistics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  194.00  in Jayud Global Logistics on December 19, 2024 and sell it today you would earn a total of  208.00  from holding Jayud Global Logistics or generate 107.22% return on investment over 90 days.

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

GXO Logistics  vs.  Jayud Global Logistics

GXO Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days GXO Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, GXO Logistics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Jayud Global Logistics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jayud Global Logistics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Jayud Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GXO Logistics and Jayud Global

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

The idea behind GXO Logistics and Jayud Global Logistics 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.