Correlation Between Natera and GXO Logistics

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

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

Diversification Opportunities for Natera and GXO Logistics

-0.26

Correlation Coefficient

Natera  GXO Logistics

Very good diversification

The 3 months correlation between Natera and GXO is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Natera Inc and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics and Natera 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 Natera Inc are associated (or correlated) with GXO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GXO Logistics has no effect on the direction of Natera i.e., Natera and GXO Logistics go up and down completely randomly.

Pair Corralation between Natera and GXO Logistics

Given the investment horizon of 90 days Natera Inc is expected to under-perform the GXO Logistics. But the stock apears to be less risky and, when comparing its historical volatility, Natera Inc is 1.03 times less risky than GXO Logistics. The stock trades about -0.1 of its potential returns per unit of risk. The GXO Logistics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  3,808  in GXO Logistics on May 7, 2025 and sell it today you would earn a total of  1,039  from holding GXO Logistics or generate 27.28% return on investment over 90 days.

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

Natera Inc  vs.  GXO Logistics

Natera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GXO Logistics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GXO Logistics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, GXO Logistics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Natera and GXO Logistics

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

The idea behind Natera Inc and GXO Logistics 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 Commodity Directory module to find actively traded commodities issued by global exchanges.