Correlation Between Kuehne + and FedEx

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

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

Diversification Opportunities for Kuehne + and FedEx

-0.08

Correlation Coefficient

Kuehne +  FedEx

Good diversification

The 3 months correlation between Kuehne and FedEx is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kuehne Nagel International and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and Kuehne + 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 Kuehne Nagel International are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of Kuehne + i.e., Kuehne + and FedEx go up and down completely randomly.

Pair Corralation between Kuehne + and FedEx

Assuming the 90 days horizon Kuehne Nagel International is expected to under-perform the FedEx. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kuehne Nagel International is 2.02 times less risky than FedEx. The pink sheet trades about -0.36 of its potential returns per unit of risk. The FedEx is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  29,205  in FedEx on September 3, 2024 and sell it today you would earn a total of  1,062  from holding FedEx or generate 3.64% return on investment over 90 days.

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

Kuehne Nagel International  vs.  FedEx

Kuehne Nagel Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuehne Nagel International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FedEx

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, FedEx is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kuehne + and FedEx

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

The idea behind Kuehne Nagel International and FedEx 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.