Correlation Between GXO Logistics and Invesco Dynamic
Can any of the company-specific risk be diversified away by investing in both GXO Logistics and Invesco Dynamic 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 GXO Logistics and Invesco Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXO Logistics and Invesco Dynamic Large, you can compare the effects of market volatilities on GXO Logistics and Invesco Dynamic 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 GXO Logistics with a short position of Invesco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Invesco Dynamic.
Diversification Opportunities for GXO Logistics and Invesco Dynamic
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GXO and Invesco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Invesco Dynamic Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Large and GXO 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 GXO Logistics are associated (or correlated) with Invesco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Large has no effect on the direction of GXO Logistics i.e., GXO Logistics and Invesco Dynamic go up and down completely randomly.
Pair Corralation between GXO Logistics and Invesco Dynamic
Considering the 90-day investment horizon GXO Logistics is expected to generate 1.98 times more return on investment than Invesco Dynamic. However, GXO Logistics is 1.98 times more volatile than Invesco Dynamic Large. It trades about 0.0 of its potential returns per unit of risk. Invesco Dynamic Large is currently generating about -0.06 per unit of risk. If you would invest 5,058 in GXO Logistics on February 4, 2024 and sell it today you would lose (31.00) from holding GXO Logistics or give up 0.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
GXO Logistics vs. Invesco Dynamic Large
Performance |
Timeline |
GXO Logistics |
Invesco Dynamic Large |
GXO Logistics and Invesco Dynamic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GXO Logistics and Invesco Dynamic
The main advantage of trading using opposite GXO Logistics and Invesco Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXO Logistics position performs unexpectedly, Invesco Dynamic 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 Invesco Dynamic will offset losses from the drop in Invesco Dynamic's long position.GXO Logistics vs. JB Hunt Transport | GXO Logistics vs. Landstar System | GXO Logistics vs. Aquagold International | GXO Logistics vs. Thrivent High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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