Correlation Between Expeditors International and United Parcel
Can any of the company-specific risk be diversified away by investing in both Expeditors International 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 Expeditors International and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expeditors International of and United Parcel Service, you can compare the effects of market volatilities on Expeditors International 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 Expeditors International with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expeditors International and United Parcel.
Diversification Opportunities for Expeditors International and United Parcel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Expeditors and United is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of 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 Expeditors International 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 Expeditors International of 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 Expeditors International i.e., Expeditors International and United Parcel go up and down completely randomly.
Pair Corralation between Expeditors International and United Parcel
Assuming the 90 days horizon Expeditors International is expected to generate 2.88 times less return on investment than United Parcel. But when comparing it to its historical volatility, Expeditors International of is 1.06 times less risky than United Parcel. It trades about 0.03 of its potential returns per unit of risk. United Parcel Service is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,506 in United Parcel Service on September 12, 2024 and sell it today you would earn a total of 802.00 from holding United Parcel Service or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expeditors International of vs. United Parcel Service
Performance |
| Timeline |
| Expeditors International |
| United Parcel Service |
Expeditors International and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expeditors International and United Parcel
The main advantage of trading using opposite Expeditors International and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expeditors International 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.| Expeditors International vs. ONWARD MEDICAL BV | Expeditors International vs. SCANDMEDICAL SOLDK 040 | Expeditors International vs. Calibre Mining Corp | Expeditors International vs. AVITA Medical |
| United Parcel vs. SOLSTAD OFFSHORE NK | United Parcel vs. FEMALE HEALTH | United Parcel vs. SIEM OFFSHORE NEW | United Parcel vs. Natural Health Trends |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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