Correlation Between FedEx Corp and Sovereign Metals

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

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

Diversification Opportunities for FedEx Corp and Sovereign Metals

-0.82

Correlation Coefficient

FedEx Corp  Sovereign Metals

Pay attention - limited upside

The 3 months correlation between FedEx and Sovereign is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding FedEx Corp and Sovereign Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sovereign Metals and FedEx Corp 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 FedEx Corp are associated (or correlated) with Sovereign Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sovereign Metals has no effect on the direction of FedEx Corp i.e., FedEx Corp and Sovereign Metals go up and down completely randomly.

Pair Corralation between FedEx Corp and Sovereign Metals

Assuming the 90 days trading horizon FedEx Corp is expected to generate 0.44 times more return on investment than Sovereign Metals. However, FedEx Corp is 2.29 times less risky than Sovereign Metals. It trades about 0.21 of its potential returns per unit of risk. Sovereign Metals Limited is currently generating about -0.08 per unit of risk. If you would invest  19,316  in FedEx Corp on September 8, 2025 and sell it today you would earn a total of  4,214  from holding FedEx Corp or generate 21.82% return on investment over 90 days.

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

FedEx Corp  vs.  Sovereign Metals Limited

FedEx Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FedEx Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sovereign Metals

Risk-Adjusted Performance

Weakest

Over the last 90 days Sovereign Metals Limited 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 basic indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FedEx Corp and Sovereign Metals

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

The idea behind FedEx Corp and Sovereign Metals Limited 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.