Correlation Between Pitney Bowes and Freightos Limited

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

By analyzing existing cross correlation between Pitney Bowes and Freightos Limited Ordinary, you can compare the effects of market volatilities on Pitney Bowes and Freightos Limited 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 Freightos Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pitney Bowes and Freightos Limited.

Diversification Opportunities for Pitney Bowes and Freightos Limited

0.36

Correlation Coefficient

Pitney Bowes  Freightos Limited

Weak diversification

The 3 months correlation between Pitney and Freightos is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes and Freightos Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightos Limited 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 are associated (or correlated) with Freightos Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightos Limited has no effect on the direction of Pitney Bowes i.e., Pitney Bowes and Freightos Limited go up and down completely randomly.

Pair Corralation between Pitney Bowes and Freightos Limited

Considering the 90-day investment horizon Pitney Bowes is expected to generate 0.67 times more return on investment than Freightos Limited. However, Pitney Bowes is 1.49 times less risky than Freightos Limited. It trades about 0.09 of its potential returns per unit of risk. Freightos Limited Ordinary is currently generating about 0.05 per unit of risk. If you would invest  347.00  in Pitney Bowes on October 6, 2024 and sell it today you would earn a total of  386.00  from holding Pitney Bowes or generate 111.24% return on investment over 90 days.

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

Pitney Bowes  vs.  Freightos Limited Ordinary

Pitney Bowes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pitney Bowes are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Pitney Bowes may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Freightos Limited

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freightos Limited Ordinary are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Freightos Limited displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pitney Bowes and Freightos Limited

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

The idea behind Pitney Bowes and Freightos Limited Ordinary 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.