Correlation Between Pitney Bowes and Radiant Logistics

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

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

Diversification Opportunities for Pitney Bowes and Radiant Logistics

-0.07

Correlation Coefficient

Pitney Bowes  Radiant Logistics

Good diversification

The 3 months correlation between Pitney and Radiant is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes NT and Radiant Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Logistics and Pitney Bowes 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 Pitney Bowes NT are associated (or correlated) with Radiant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Logistics has no effect on the direction of Pitney Bowes i.e., Pitney Bowes and Radiant Logistics go up and down completely randomly.

Pair Corralation between Pitney Bowes and Radiant Logistics

Assuming the 90 days trading horizon Pitney Bowes NT is expected to generate 0.56 times more return on investment than Radiant Logistics. However, Pitney Bowes NT is 1.79 times less risky than Radiant Logistics. It trades about 0.1 of its potential returns per unit of risk. Radiant Logistics is currently generating about -0.05 per unit of risk. If you would invest  1,895  in Pitney Bowes NT on December 30, 2024 and sell it today you would earn a total of  131.00  from holding Pitney Bowes NT or generate 6.91% return on investment over 90 days.

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

Pitney Bowes NT  vs.  Radiant Logistics

Pitney Bowes NT

Risk-Adjusted Performance

OK

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

Radiant Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Radiant Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Pitney Bowes and Radiant Logistics

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

The idea behind Pitney Bowes NT and Radiant 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.