Correlation Between PS International and GXO Logistics

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

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

Diversification Opportunities for PS International and GXO Logistics

0.4

Correlation Coefficient

PS International  GXO Logistics

Very weak diversification

The 3 months correlation between PSIG and GXO is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PS International Group and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and PS International 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 PS International Group are associated (or correlated) with GXO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GXO Logistics has no effect on the direction of PS International i.e., PS International and GXO Logistics go up and down completely randomly.

Pair Corralation between PS International and GXO Logistics

Given the investment horizon of 90 days PS International Group is expected to generate 2.13 times more return on investment than GXO Logistics. However, PS International is 2.13 times more volatile than GXO Logistics. It trades about 0.05 of its potential returns per unit of risk. GXO Logistics is currently generating about -0.11 per unit of risk. If you would invest  49.00  in PS International Group on November 29, 2024 and sell it today you would earn a total of  0.00  from holding PS International Group or generate 0.0% return on investment over 90 days.

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

PS International Group  vs.  GXO Logistics

PS International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PS International Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, PS International may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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 unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PS International and GXO Logistics

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

The idea behind PS International Group and GXO 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..