Correlation Between XPO Logistics and Kuehne +

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

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

Diversification Opportunities for XPO Logistics and Kuehne +

-0.75

Correlation Coefficient

XPO Logistics  Kuehne +

Pay attention - limited upside

The 3 months correlation between XPO and Kuehne is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding XPO Logistics 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 XPO Logistics 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 XPO Logistics are associated (or correlated) with Kuehne +. 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 XPO Logistics i.e., XPO Logistics and Kuehne + go up and down completely randomly.

Pair Corralation between XPO Logistics and Kuehne +

Considering the 90-day investment horizon XPO Logistics is expected to under-perform the Kuehne +. In addition to that, XPO Logistics is 1.36 times more volatile than Kuehne Nagel International. It trades about -0.09 of its total potential returns per unit of risk. Kuehne Nagel International is currently generating about 0.06 per unit of volatility. If you would invest  22,949  in Kuehne Nagel International on December 27, 2024 and sell it today you would earn a total of  1,176  from holding Kuehne Nagel International or generate 5.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

XPO Logistics  vs.  Kuehne Nagel International

XPO Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days XPO Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kuehne Nagel Interna

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kuehne Nagel International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Kuehne + is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with XPO Logistics and Kuehne +

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

The idea behind XPO Logistics 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.