Correlation Between United Parcel and Owens Minor
Can any of the company-specific risk be diversified away by investing in both United Parcel and Owens Minor 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 Owens Minor 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 Owens Minor, you can compare the effects of market volatilities on United Parcel and Owens Minor 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 Owens Minor. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Owens Minor.
Diversification Opportunities for United Parcel and Owens Minor
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Owens is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Owens Minor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Minor 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 Owens Minor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Minor has no effect on the direction of United Parcel i.e., United Parcel and Owens Minor go up and down completely randomly.
Pair Corralation between United Parcel and Owens Minor
Considering the 90-day investment horizon United Parcel Service is expected to under-perform the Owens Minor. But the stock apears to be less risky and, when comparing its historical volatility, United Parcel Service is 2.42 times less risky than Owens Minor. The stock trades about -0.02 of its potential returns per unit of risk. The Owens Minor is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,676 in Owens Minor on January 18, 2024 and sell it today you would lose (1,191) from holding Owens Minor or give up 32.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
United Parcel Service vs. Owens Minor
Performance |
Timeline |
United Parcel Service |
Owens Minor |
United Parcel and Owens Minor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Parcel and Owens Minor
The main advantage of trading using opposite United Parcel and Owens Minor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Owens Minor 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 Owens Minor will offset losses from the drop in Owens Minor's long position.United Parcel vs. Aquagold International | United Parcel vs. Via Renewables | United Parcel vs. T Rowe Price | United Parcel vs. Oshidori International Holdings |
Owens Minor vs. Henry Schein | Owens Minor vs. Cardinal Health | Owens Minor vs. Zynex Inc | Owens Minor vs. Patterson Companies |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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