Correlation Analysis Between DOW and United Parcel

This module allows you to analyze existing cross correlation between DOW and United Parcel Service. You can compare the effects of market volatilities on DOW and United Parcel 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 DOW with a short position of United Parcel. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and United Parcel.
Horizon     30 Days    Login   to change
Compare Efficiency

Comparative Performance

 Predicted Return Density 

DOW  vs.  United Parcel Service Inc

 Performance (%) 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.7 times more return on investment than United Parcel. However, DOW is 1.44 times less risky than United Parcel. It trades about 0.02 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.05 per unit of risk. If you would invest  2,446,469  in DOW on December 21, 2018 and sell it today you would earn a total of  24,166  from holding DOW or generate 0.99% return on investment over 30 days.

Pair Corralation between DOW and United Parcel

Time Period2 Months [change]
StrengthVery Strong
ValuesDaily Returns

Diversification Opportunities for DOW and United Parcel

DOW diversification synergy

Almost no diversification

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

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See also your portfolio center. Please also try Money Flow Index module to determine momentum by analyzing money flow index and other technical indicators.