Correlation Between Royal Mail and Kuehne Nagel

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

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

Diversification Opportunities for Royal Mail and Kuehne Nagel

-0.56

Correlation Coefficient

Royal Mail  Kuehne Nagel

Excellent diversification

The 3 months correlation between Royal and Kuehne is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Royal Mail Plc and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna and Royal Mail 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 Royal Mail Plc are associated (or correlated) with Kuehne Nagel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of Royal Mail i.e., Royal Mail and Kuehne Nagel go up and down completely randomly.

Pair Corralation between Royal Mail and Kuehne Nagel

If you would invest  384.00  in Royal Mail Plc on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Royal Mail Plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Royal Mail Plc  vs.  Kuehne Nagel International

Royal Mail Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Royal Mail Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Royal Mail is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Royal Mail and Kuehne Nagel

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

The idea behind Royal Mail Plc and Kuehne Nagel International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.