Correlation Between United Parcel and Aquagold International

Can any of the company-specific risk be diversified away by investing in both United Parcel and Aquagold International 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 Aquagold International 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 Aquagold International, you can compare the effects of market volatilities on United Parcel and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Aquagold International.

Diversification Opportunities for United Parcel and Aquagold International

0.15

Correlation Coefficient

United Parcel  Aquagold International

Average diversification

The 3 months correlation between United and Aquagold is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of United Parcel i.e., United Parcel and Aquagold International go up and down completely randomly.

Pair Corralation between United Parcel and Aquagold International

If you would invest  14,762  in United Parcel Service on January 30, 2024 and sell it today you would lose (3.00) from holding United Parcel Service or give up 0.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

United Parcel Service  vs.  Aquagold International

United Parcel Service

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Parcel Service are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, United Parcel is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Aquagold International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aquagold International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Aquagold International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Parcel and Aquagold International

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

The idea behind United Parcel Service and Aquagold International 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.