Correlation Between Compagnie and FedEx

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

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

Diversification Opportunities for Compagnie and FedEx

0.71

Correlation Coefficient

Compagnie  FedEx

Poor diversification

The 3 months correlation between Compagnie and FedEx is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and Compagnie 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 Compagnie de Saint Gobain 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 Compagnie i.e., Compagnie and FedEx go up and down completely randomly.

Pair Corralation between Compagnie and FedEx

Assuming the 90 days horizon Compagnie de Saint Gobain is expected to generate 0.78 times more return on investment than FedEx. However, Compagnie de Saint Gobain is 1.28 times less risky than FedEx. It trades about 0.09 of its potential returns per unit of risk. FedEx is currently generating about 0.03 per unit of risk. If you would invest  10,645  in Compagnie de Saint Gobain on May 2, 2025 and sell it today you would earn a total of  800.00  from holding Compagnie de Saint Gobain or generate 7.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Compagnie de Saint Gobain  vs.  FedEx

Compagnie de Saint

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Compagnie may actually be approaching a critical reversion point that can send shares even higher in August 2025.

FedEx

Risk-Adjusted Performance

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Compagnie and FedEx

The main advantage of trading using opposite Compagnie and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie 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 Compagnie de Saint Gobain 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.