Correlation Between Freightos Limited and Radiant Logistics

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

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

Diversification Opportunities for Freightos Limited and Radiant Logistics

0.66

Correlation Coefficient

Freightos Limited  Radiant Logistics

Poor diversification

The 3 months correlation between Freightos and Radiant is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Freightos Limited Ordinary and Radiant Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Logistics and Freightos Limited 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 Freightos Limited Ordinary are associated (or correlated) with Radiant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Logistics has no effect on the direction of Freightos Limited i.e., Freightos Limited and Radiant Logistics go up and down completely randomly.

Pair Corralation between Freightos Limited and Radiant Logistics

Given the investment horizon of 90 days Freightos Limited Ordinary is expected to generate 3.2 times more return on investment than Radiant Logistics. However, Freightos Limited is 3.2 times more volatile than Radiant Logistics. It trades about 0.07 of its potential returns per unit of risk. Radiant Logistics is currently generating about 0.14 per unit of risk. If you would invest  154.00  in Freightos Limited Ordinary on September 4, 2024 and sell it today you would earn a total of  27.00  from holding Freightos Limited Ordinary or generate 17.53% return on investment over 90 days.

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

Freightos Limited Ordinary  vs.  Radiant Logistics

Freightos Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Freightos Limited Ordinary are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Freightos Limited displayed solid returns over the last few months and may actually be approaching a breakup point.

Radiant Logistics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Radiant Logistics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Radiant Logistics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freightos Limited and Radiant Logistics

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

The idea behind Freightos Limited Ordinary and Radiant 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.