Correlation Between Inter Industries and United Parcel

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Inter Industries 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 Inter Industries and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Industries and United Parcel Service, you can compare the effects of market volatilities on Inter Industries 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 Inter Industries with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Industries and United Parcel.

Diversification Opportunities for Inter Industries and United Parcel

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Inter and United is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Inter Industries 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 Inter Industries 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 Inter Industries 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 Inter Industries i.e., Inter Industries and United Parcel go up and down completely randomly.

Pair Corralation between Inter Industries and United Parcel

Assuming the 90 days trading horizon Inter Industries is expected to under-perform the United Parcel. In addition to that, Inter Industries is 1.36 times more volatile than United Parcel Service. It trades about -0.18 of its total potential returns per unit of risk. United Parcel Service is currently generating about -0.05 per unit of volatility. If you would invest  15,627  in United Parcel Service on December 29, 2023 and sell it today you would lose (894.00) from holding United Parcel Service or give up 5.72% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy83.33%
ValuesDaily Returns

Inter Industries  vs.  United Parcel Service

 Performance 
       Timeline  
Inter Industries 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Inter Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
United Parcel Service 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days United Parcel Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, United Parcel is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Inter Industries and United Parcel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inter Industries and United Parcel

The main advantage of trading using opposite Inter Industries and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Industries 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 Inter Industries 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Equity Valuation
Check real value of public entities based on technical and fundamental data
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Commodity Directory
Find actively traded commodities issued by global exchanges
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios