Correlation Between Expeditors International and Landstar System

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Expeditors International and Landstar System 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 Expeditors International and Landstar System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expeditors International of and Landstar System, you can compare the effects of market volatilities on Expeditors International and Landstar System 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 Expeditors International with a short position of Landstar System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expeditors International and Landstar System.

Diversification Opportunities for Expeditors International and Landstar System

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Expeditors and Landstar is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and Landstar System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landstar System and Expeditors 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 Expeditors International of are associated (or correlated) with Landstar System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landstar System has no effect on the direction of Expeditors International i.e., Expeditors International and Landstar System go up and down completely randomly.

Pair Corralation between Expeditors International and Landstar System

Given the investment horizon of 90 days Expeditors International is expected to generate 1.6 times less return on investment than Landstar System. But when comparing it to its historical volatility, Expeditors International of is 1.02 times less risky than Landstar System. It trades about 0.01 of its potential returns per unit of risk. Landstar System is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17,523  in Landstar System on July 10, 2024 and sell it today you would earn a total of  786.00  from holding Landstar System or generate 4.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Expeditors International of  vs.  Landstar System

 Performance 
       Timeline  
Expeditors International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Expeditors International of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Expeditors International is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Landstar System 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Landstar System are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Landstar System is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Expeditors International and Landstar System Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Expeditors International and Landstar System

The main advantage of trading using opposite Expeditors International and Landstar System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expeditors International position performs unexpectedly, Landstar System 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 Landstar System will offset losses from the drop in Landstar System's long position.
The idea behind Expeditors International of and Landstar System 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios