Correlation Between First American and United Parcel
Can any of the company-specific risk be diversified away by investing in both First American 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 First American and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and United Parcel Service, you can compare the effects of market volatilities on First American 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 First American with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and United Parcel.
Diversification Opportunities for First American and United Parcel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and United is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds 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 First American 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 First American Funds 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 First American i.e., First American and United Parcel go up and down completely randomly.
Pair Corralation between First American and United Parcel
If you would invest 100.00 in First American Funds on January 24, 2024 and sell it today you would earn a total of 0.00 from holding First American Funds or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Funds vs. United Parcel Service
Performance |
| Timeline |
| First American Funds |
| United Parcel Service |
First American and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and United Parcel
The main advantage of trading using opposite First American and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American 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.The idea behind First American Funds and United Parcel Service 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.| United Parcel vs. JB Hunt Transport | United Parcel vs. Aquagold International | United Parcel vs. Thrivent High Yield | United Parcel vs. Morningstar Unconstrained Allocation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets |