Correlation Between Altra Industrial and United Parcel
Can any of the company-specific risk be diversified away by investing in both Altra Industrial and United Parcel 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 Altra Industrial and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altra Industrial Motion and United Parcel Service, you can compare the effects of market volatilities on Altra Industrial 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 Altra Industrial with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altra Industrial and United Parcel.
Diversification Opportunities for Altra Industrial and United Parcel
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Altra and United is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Altra Industrial Motion and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service and Altra Industrial 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 Altra Industrial Motion 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 Altra Industrial i.e., Altra Industrial and United Parcel go up and down completely randomly.
Pair Corralation between Altra Industrial and United Parcel
If you would invest 6,198 in Altra Industrial Motion on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Altra Industrial Motion or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Altra Industrial Motion vs. United Parcel Service
Performance |
| Timeline |
| Altra Industrial Motion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United Parcel Service |
Altra Industrial and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altra Industrial and United Parcel
The main advantage of trading using opposite Altra Industrial and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altra Industrial position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| Altra Industrial vs. Franklin Electric Co | Altra Industrial vs. Donaldson | Altra Industrial vs. John Bean Technologies | Altra Industrial vs. ITT Inc |
| United Parcel vs. GXO Logistics | United Parcel vs. JB Hunt Transport | United Parcel vs. Expeditors International of | United Parcel vs. CH Robinson Worldwide |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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