Correlation Between UPS CDR and Power Financial
Can any of the company-specific risk be diversified away by investing in both UPS CDR and Power Financial 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 UPS CDR and Power Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UPS CDR and Power Financial Corp, you can compare the effects of market volatilities on UPS CDR and Power Financial 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 UPS CDR with a short position of Power Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPS CDR and Power Financial.
Diversification Opportunities for UPS CDR and Power Financial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UPS and Power is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding UPS CDR and Power Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Financial Corp and UPS CDR 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 UPS CDR are associated (or correlated) with Power Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Financial Corp has no effect on the direction of UPS CDR i.e., UPS CDR and Power Financial go up and down completely randomly.
Pair Corralation between UPS CDR and Power Financial
Assuming the 90 days trading horizon UPS CDR is expected to generate 0.6 times more return on investment than Power Financial. However, UPS CDR is 1.67 times less risky than Power Financial. It trades about 0.25 of its potential returns per unit of risk. Power Financial Corp is currently generating about 0.08 per unit of risk. If you would invest 1,602 in UPS CDR on October 20, 2024 and sell it today you would earn a total of 85.00 from holding UPS CDR or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UPS CDR vs. Power Financial Corp
Performance |
| Timeline |
| UPS CDR |
| Power Financial Corp |
UPS CDR and Power Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UPS CDR and Power Financial
The main advantage of trading using opposite UPS CDR and Power Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPS CDR position performs unexpectedly, Power Financial 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 Power Financial will offset losses from the drop in Power Financial's long position.| UPS CDR vs. Walmart Inc CDR | UPS CDR vs. Amazon CDR | UPS CDR vs. Berkshire Hathaway CDR | UPS CDR vs. UnitedHealth Group CDR |
| Power Financial vs. Northview Residential REIT | Power Financial vs. Wallbridge Mining | Power Financial vs. Auxly Cannabis Group | Power Financial vs. First Mining Gold |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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