Correlation Between United Parcel and Logista
Can any of the company-specific risk be diversified away by investing in both United Parcel and Logista 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 Logista 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 Logista, you can compare the effects of market volatilities on United Parcel and Logista 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 Logista. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Logista.
Diversification Opportunities for United Parcel and Logista
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Logista is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Logista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logista 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 Logista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logista has no effect on the direction of United Parcel i.e., United Parcel and Logista go up and down completely randomly.
Pair Corralation between United Parcel and Logista
Assuming the 90 days trading horizon United Parcel is expected to generate 1.45 times less return on investment than Logista. In addition to that, United Parcel is 1.43 times more volatile than Logista. It trades about 0.2 of its total potential returns per unit of risk. Logista is currently generating about 0.41 per unit of volatility. If you would invest 2,782 in Logista on September 1, 2024 and sell it today you would earn a total of 218.00 from holding Logista or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Parcel Service vs. Logista
Performance |
| Timeline |
| United Parcel Service |
| Logista |
United Parcel and Logista Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Logista
The main advantage of trading using opposite United Parcel and Logista positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Logista 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 Logista will offset losses from the drop in Logista's long position.| United Parcel vs. ZTO Express | United Parcel vs. Superior Plus Corp | United Parcel vs. Origin Agritech | United Parcel vs. Identiv |
| Logista vs. Addus HomeCare | Logista vs. HomeToGo SE | Logista vs. PennantPark Investment | Logista vs. Haier Smart Home |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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