Correlation Between GXO Logistics and Figs

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

By analyzing existing cross correlation between GXO Logistics and Figs Inc, you can compare the effects of market volatilities on GXO Logistics and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXO Logistics and Figs.

Diversification Opportunities for GXO Logistics and Figs

-0.02

Correlation Coefficient

GXO Logistics  Figs

Good diversification

The 3 months correlation between GXO and Figs is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GXO Logistics and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of GXO Logistics i.e., GXO Logistics and Figs go up and down completely randomly.

Pair Corralation between GXO Logistics and Figs

Considering the 90-day investment horizon GXO Logistics is expected to generate 2.2 times less return on investment than Figs. But when comparing it to its historical volatility, GXO Logistics is 1.5 times less risky than Figs. It trades about 0.02 of its potential returns per unit of risk. Figs Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  519.00  in Figs Inc on September 12, 2024 and sell it today you would lose (6.00) from holding Figs Inc or give up 1.16% 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.  Figs Inc

GXO Logistics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GXO Logistics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GXO Logistics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Figs Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Figs Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Figs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GXO Logistics and Figs

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

The idea behind GXO Logistics and Figs Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..