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
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Expeditors and United is -0.17. 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
Given the investment horizon of 90 days Expeditors International of is expected to generate 0.75 times more return on investment than United Parcel. However, Expeditors International of is 1.33 times less risky than United Parcel. It trades about 0.01 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.01 per unit of risk. If you would invest 11,816 in Expeditors International of on August 24, 2024 and sell it today you would earn a total of 282.00 from holding Expeditors International of or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| 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. Landstar System | Expeditors International vs. JB Hunt Transport | Expeditors International vs. Hub Group | Expeditors International vs. Forward Air |
| United Parcel vs. GXO Logistics | United Parcel vs. JB Hunt Transport | United Parcel vs. Expeditors International of | United Parcel vs. CH Robinson Worldwide |
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.
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