Correlation Between Universal Logistics and Invesco Global

Can any of the company-specific risk be diversified away by investing in both Universal Logistics and Invesco Global 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 Universal Logistics and Invesco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Universal Logistics Holdings and Invesco Global Respons, you can compare the effects of market volatilities on Universal Logistics and Invesco Global 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 Universal Logistics with a short position of Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Logistics and Invesco Global.

Diversification Opportunities for Universal Logistics and Invesco Global

0.88

Correlation Coefficient

Universal Logistics  Invesco Global

Very poor diversification

The 3 months correlation between Universal and Invesco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Universal Logistics Holdings and Invesco Global Respons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Respons and Universal Logistics 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 Universal Logistics Holdings are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Respons has no effect on the direction of Universal Logistics i.e., Universal Logistics and Invesco Global go up and down completely randomly.

Pair Corralation between Universal Logistics and Invesco Global

Considering the 90-day investment horizon Universal Logistics Holdings is expected to generate 2.86 times more return on investment than Invesco Global. However, Universal Logistics is 2.86 times more volatile than Invesco Global Respons. It trades about -0.05 of its potential returns per unit of risk. Invesco Global Respons is currently generating about -0.19 per unit of risk. If you would invest  3,394  in Universal Logistics Holdings on January 17, 2024 and sell it today you would lose (84.00) from holding Universal Logistics Holdings or give up 2.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Universal Logistics Holdings  vs.  Invesco Global Respons

Universal Logistics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Logistics Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Universal Logistics demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Invesco Global Respons

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Global Respons are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Universal Logistics and Invesco Global

The main advantage of trading using opposite Universal Logistics and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Logistics position performs unexpectedly, Invesco Global 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 Invesco Global will offset losses from the drop in Invesco Global's long position.

The idea behind Universal Logistics Holdings and Invesco Global Respons 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.