Correlation Between Partner and United Parcel
Can any of the company-specific risk be diversified away by investing in both Partner 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 Partner and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partner and United Parcel Service, you can compare the effects of market volatilities on Partner 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 Partner with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partner and United Parcel.
Diversification Opportunities for Partner and United Parcel
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Partner and United is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Partner 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 Partner 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 Partner 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 Partner i.e., Partner and United Parcel go up and down completely randomly.
Pair Corralation between Partner and United Parcel
Assuming the 90 days trading horizon Partner is expected to under-perform the United Parcel. But the stock apears to be less risky and, when comparing its historical volatility, Partner is 1.14 times less risky than United Parcel. The stock trades about -0.35 of its potential returns per unit of risk. The United Parcel Service is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 14,827 in United Parcel Service on December 29, 2023 and sell it today you would lose (94.00) from holding United Parcel Service or give up 0.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 77.27% |
Values | Daily Returns |
Partner vs. United Parcel Service
Performance |
Timeline |
Partner |
United Parcel Service |
Partner and United Parcel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Partner and United Parcel
The main advantage of trading using opposite Partner and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partner 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.Partner vs. Magic Software Enterprises | Partner vs. Scope Metals Group | Partner vs. One Software Technologies | Partner vs. Suny Cellular Communication |
United Parcel vs. Expeditors International | United Parcel vs. Jayud Global Logistics | United Parcel vs. Freightos Limited Warrants | United Parcel vs. JB Hunt Transport |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
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 | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |