Correlation Between Landstar System and Kuehne Nagel

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

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

Diversification Opportunities for Landstar System and Kuehne Nagel

0.26

Correlation Coefficient

Landstar System  Kuehne Nagel

Modest diversification

The 3 months correlation between Landstar and Kuehne is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Landstar System and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna and Landstar System 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 Landstar System are associated (or correlated) with Kuehne Nagel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of Landstar System i.e., Landstar System and Kuehne Nagel go up and down completely randomly.

Pair Corralation between Landstar System and Kuehne Nagel

Given the investment horizon of 90 days Landstar System is expected to under-perform the Kuehne Nagel. In addition to that, Landstar System is 1.07 times more volatile than Kuehne Nagel International. It trades about -0.3 of its total potential returns per unit of risk. Kuehne Nagel International is currently generating about -0.18 per unit of volatility. If you would invest  4,817  in Kuehne Nagel International on October 3, 2024 and sell it today you would lose (229.00) from holding Kuehne Nagel International or give up 4.75% of portfolio value over 90 days.

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

Landstar System  vs.  Kuehne Nagel International

Landstar System

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Landstar System has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Landstar System is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Kuehne Nagel Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuehne Nagel International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Landstar System and Kuehne Nagel

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

The idea behind Landstar System and Kuehne Nagel International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.