Correlation Between United Parcel and DSV Panalpina
Can any of the company-specific risk be diversified away by investing in both United Parcel and DSV Panalpina 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 DSV Panalpina 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 DSV Panalpina AS, you can compare the effects of market volatilities on United Parcel and DSV Panalpina 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 DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and DSV Panalpina.
Diversification Opportunities for United Parcel and DSV Panalpina
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and DSV is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS 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 DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of United Parcel i.e., United Parcel and DSV Panalpina go up and down completely randomly.
Pair Corralation between United Parcel and DSV Panalpina
Assuming the 90 days trading horizon United Parcel Service is expected to under-perform the DSV Panalpina. In addition to that, United Parcel is 2.65 times more volatile than DSV Panalpina AS. It trades about -0.13 of its total potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.19 per unit of volatility. If you would invest 20,440 in DSV Panalpina AS on November 2, 2024 and sell it today you would lose (1,120) from holding DSV Panalpina AS or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. DSV Panalpina AS
Performance |
| Timeline |
| United Parcel Service |
| DSV Panalpina AS |
United Parcel and DSV Panalpina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and DSV Panalpina
The main advantage of trading using opposite United Parcel and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, DSV Panalpina 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 DSV Panalpina will offset losses from the drop in DSV Panalpina's long position.| United Parcel vs. FedEx | United Parcel vs. DSV Panalpina AS | United Parcel vs. ZTO Express | United Parcel vs. Bollor SE |
| DSV Panalpina vs. United Parcel Service | DSV Panalpina vs. FedEx | DSV Panalpina vs. ZTO Express | DSV Panalpina vs. Bollor SE |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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