Correlation Between United Parcel and Canadian National
Can any of the company-specific risk be diversified away by investing in both United Parcel and Canadian National 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 Canadian National 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 Canadian National Railway, you can compare the effects of market volatilities on United Parcel and Canadian National 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 Canadian National. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Canadian National.
Diversification Opportunities for United Parcel and Canadian National
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Canadian is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Canadian National Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian National Railway 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 Canadian National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian National Railway has no effect on the direction of United Parcel i.e., United Parcel and Canadian National go up and down completely randomly.
Pair Corralation between United Parcel and Canadian National
Considering the 90-day investment horizon United Parcel Service is expected to under-perform the Canadian National. In addition to that, United Parcel is 2.5 times more volatile than Canadian National Railway. It trades about -0.11 of its total potential returns per unit of risk. Canadian National Railway is currently generating about -0.09 per unit of volatility. If you would invest 10,854 in Canadian National Railway on November 3, 2024 and sell it today you would lose (403.00) from holding Canadian National Railway or give up 3.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. Canadian National Railway
Performance |
| Timeline |
| United Parcel Service |
| Canadian National Railway |
United Parcel and Canadian National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Canadian National
The main advantage of trading using opposite United Parcel and Canadian National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Canadian National 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 Canadian National will offset losses from the drop in Canadian National's long position.| United Parcel vs. GXO Logistics | United Parcel vs. JB Hunt Transport | United Parcel vs. Expeditors International of | United Parcel vs. CH Robinson Worldwide |
| Canadian National vs. Union Pacific | Canadian National vs. CSX Corporation | Canadian National vs. Norfolk Southern | Canadian National vs. Westinghouse Air Brake |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |