Correlation Between Royal Mail and Expeditors International

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

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

Diversification Opportunities for Royal Mail and Expeditors International

0.0

Correlation Coefficient

Royal Mail  Expeditors International

Pay attention - limited upside

The 3 months correlation between Royal and Expeditors is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Royal Mail Plc and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International and Royal Mail 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 Royal Mail Plc are associated (or correlated) with Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of Royal Mail i.e., Royal Mail and Expeditors International go up and down completely randomly.

Pair Corralation between Royal Mail and Expeditors International

If you would invest  11,080  in Expeditors International of on December 30, 2024 and sell it today you would earn a total of  893.00  from holding Expeditors International of or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Royal Mail Plc  vs.  Expeditors International of

Royal Mail Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Royal Mail Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Royal Mail is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Expeditors International

Risk-Adjusted Performance

OK

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

Pair Trading with Royal Mail and Expeditors International

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

The idea behind Royal Mail Plc and Expeditors International of 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.