Correlation Between Universal Logistics and EVI Industries
Can any of the company-specific risk be diversified away by investing in both Universal Logistics and EVI Industries 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 Universal Logistics and EVI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Logistics Holdings and EVI Industries, you can compare the effects of market volatilities on Universal Logistics and EVI Industries 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 Universal Logistics with a short position of EVI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Logistics and EVI Industries.
Diversification Opportunities for Universal Logistics and EVI Industries
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and EVI is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Universal Logistics Holdings and EVI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVI Industries and Universal Logistics 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 Universal Logistics Holdings are associated (or correlated) with EVI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVI Industries has no effect on the direction of Universal Logistics i.e., Universal Logistics and EVI Industries go up and down completely randomly.
Pair Corralation between Universal Logistics and EVI Industries
Considering the 90-day investment horizon Universal Logistics Holdings is expected to generate 0.9 times more return on investment than EVI Industries. However, Universal Logistics Holdings is 1.11 times less risky than EVI Industries. It trades about 0.33 of its potential returns per unit of risk. EVI Industries is currently generating about 0.01 per unit of risk. If you would invest 3,962 in Universal Logistics Holdings on August 27, 2024 and sell it today you would earn a total of 1,079 from holding Universal Logistics Holdings or generate 27.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Logistics Holdings vs. EVI Industries
Performance |
| Timeline |
| Universal Logistics |
| EVI Industries |
Universal Logistics and EVI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Logistics and EVI Industries
The main advantage of trading using opposite Universal Logistics and EVI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Logistics position performs unexpectedly, EVI Industries 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 EVI Industries will offset losses from the drop in EVI Industries' long position.| Universal Logistics vs. Covenant Logistics Group, | Universal Logistics vs. Marten Transport | Universal Logistics vs. Midland States Bancorp | Universal Logistics vs. PC Connection |
| EVI Industries vs. DXP Enterprises | EVI Industries vs. Global Industrial Co | EVI Industries vs. Core Main | EVI Industries vs. Watsco Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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