Correlation Between United Parcel and Brinks
Can any of the company-specific risk be diversified away by investing in both United Parcel and Brinks 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 United Parcel and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Parcel Service and Brinks Company, you can compare the effects of market volatilities on United Parcel and Brinks 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 United Parcel with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Brinks.
Diversification Opportunities for United Parcel and Brinks
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Brinks is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and United Parcel 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 United Parcel Service are associated (or correlated) with Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Company has no effect on the direction of United Parcel i.e., United Parcel and Brinks go up and down completely randomly.
Pair Corralation between United Parcel and Brinks
Considering the 90-day investment horizon United Parcel is expected to generate 193.09 times less return on investment than Brinks. In addition to that, United Parcel is 1.1 times more volatile than Brinks Company. It trades about 0.0 of its total potential returns per unit of risk. Brinks Company is currently generating about 0.13 per unit of volatility. If you would invest 6,732 in Brinks Company on January 19, 2024 and sell it today you would earn a total of 1,890 from holding Brinks Company or generate 28.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
United Parcel Service vs. Brinks Company
Performance |
| Timeline |
| United Parcel Service |
| Brinks Company |
United Parcel and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Brinks
The main advantage of trading using opposite United Parcel and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Brinks 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 Brinks will offset losses from the drop in Brinks' long position.| United Parcel vs. GXO Logistics | United Parcel vs. JB Hunt Transport | United Parcel vs. Expeditors International of | United Parcel vs. CH Robinson Worldwide |
| Brinks vs. MSA Safety | Brinks vs. Resideo Technologies | Brinks vs. Mistras Group | Brinks vs. NL Industries |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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