Correlation Between United Parcel and Assura PLC
Can any of the company-specific risk be diversified away by investing in both United Parcel and Assura PLC 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 Assura PLC 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 Assura PLC, you can compare the effects of market volatilities on United Parcel and Assura PLC 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 Assura PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Assura PLC.
Diversification Opportunities for United Parcel and Assura PLC
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Assura is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Assura PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assura PLC 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 Assura PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assura PLC has no effect on the direction of United Parcel i.e., United Parcel and Assura PLC go up and down completely randomly.
Pair Corralation between United Parcel and Assura PLC
Assuming the 90 days trading horizon United Parcel Service is expected to generate 0.9 times more return on investment than Assura PLC. However, United Parcel Service is 1.11 times less risky than Assura PLC. It trades about 0.08 of its potential returns per unit of risk. Assura PLC is currently generating about -0.05 per unit of risk. If you would invest 13,293 in United Parcel Service on September 1, 2024 and sell it today you would earn a total of 287.00 from holding United Parcel Service or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. Assura PLC
Performance |
| Timeline |
| United Parcel Service |
| Assura PLC |
United Parcel and Assura PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Assura PLC
The main advantage of trading using opposite United Parcel and Assura PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Assura PLC 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 Assura PLC will offset losses from the drop in Assura PLC's long position.| United Parcel vs. Target Healthcare REIT | United Parcel vs. Abingdon Health Plc | United Parcel vs. JLEN Environmental Assets | United Parcel vs. Iron Mountain |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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