Correlation Between Communication Services and Expeditors International

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

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

Diversification Opportunities for Communication Services and Expeditors International

-0.43

Correlation Coefficient

Communication Services  Expeditors International

Very good diversification

The 3 months correlation between Communication and Expeditors is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Communication Services Select and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International and Communication Services 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 Communication Services Select are associated (or correlated) with Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of Communication Services i.e., Communication Services and Expeditors International go up and down completely randomly.

Pair Corralation between Communication Services and Expeditors International

Considering the 90-day investment horizon Communication Services is expected to generate 4.85 times less return on investment than Expeditors International. But when comparing it to its historical volatility, Communication Services Select is 2.32 times less risky than Expeditors International. It trades about 0.08 of its potential returns per unit of risk. Expeditors International of is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  12,085  in Expeditors International of on September 2, 2025 and sell it today you would earn a total of  2,605  from holding Expeditors International of or generate 21.56% return on investment over 90 days.

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

Communication Services Select  vs.  Expeditors International of

Communication Services

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Communication Services Select are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Communication Services is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Expeditors International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Expeditors International of are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Expeditors International exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Communication Services and Expeditors International

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

The idea behind Communication Services Select and Expeditors International of 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.