Correlation Between Capital Metals and United Parcel
Can any of the company-specific risk be diversified away by investing in both Capital Metals 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 Capital Metals and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Metals PLC and United Parcel Service, you can compare the effects of market volatilities on Capital Metals 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 Capital Metals with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and United Parcel.
Diversification Opportunities for Capital Metals and United Parcel
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and United is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC 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 Capital Metals 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 Capital Metals PLC 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 Capital Metals i.e., Capital Metals and United Parcel go up and down completely randomly.
Pair Corralation between Capital Metals and United Parcel
Assuming the 90 days trading horizon Capital Metals PLC is expected to generate 6.4 times more return on investment than United Parcel. However, Capital Metals is 6.4 times more volatile than United Parcel Service. It trades about 0.03 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.03 per unit of risk. If you would invest 275.00 in Capital Metals PLC on October 12, 2024 and sell it today you would lose (105.00) from holding Capital Metals PLC or give up 38.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Capital Metals PLC vs. United Parcel Service
Performance |
| Timeline |
| Capital Metals PLC |
| United Parcel Service |
Capital Metals and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Metals and United Parcel
The main advantage of trading using opposite Capital Metals and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Metals 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.| Capital Metals vs. Givaudan SA | Capital Metals vs. Antofagasta PLC | Capital Metals vs. Ferrexpo PLC | Capital Metals vs. Atalaya Mining |
| United Parcel vs. Vulcan Materials Co | United Parcel vs. AMG Advanced Metallurgical | United Parcel vs. First Class Metals | United Parcel vs. Capital Metals PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |