Correlation Between United Parcel and Freightos Limited
Can any of the company-specific risk be diversified away by investing in both United Parcel and Freightos Limited 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 Freightos Limited 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 Freightos Limited Ordinary, you can compare the effects of market volatilities on United Parcel and Freightos Limited 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 Freightos Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Freightos Limited.
Diversification Opportunities for United Parcel and Freightos Limited
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Freightos is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Freightos Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightos Limited 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 Freightos Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightos Limited has no effect on the direction of United Parcel i.e., United Parcel and Freightos Limited go up and down completely randomly.
Pair Corralation between United Parcel and Freightos Limited
Considering the 90-day investment horizon United Parcel is expected to generate 4.98 times less return on investment than Freightos Limited. But when comparing it to its historical volatility, United Parcel Service is 4.44 times less risky than Freightos Limited. It trades about 0.25 of its potential returns per unit of risk. Freightos Limited Ordinary is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Freightos Limited Ordinary on October 26, 2024 and sell it today you would earn a total of 84.00 from holding Freightos Limited Ordinary or generate 29.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. Freightos Limited Ordinary
Performance |
| Timeline |
| United Parcel Service |
| Freightos Limited |
United Parcel and Freightos Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Freightos Limited
The main advantage of trading using opposite United Parcel and Freightos Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Freightos Limited 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 Freightos Limited will offset losses from the drop in Freightos Limited's long position.| United Parcel vs. Expeditors International of | United Parcel vs. FedEx | United Parcel vs. BingEx | United Parcel vs. Globavend Holdings Limited |
| Freightos Limited vs. Hub Group | Freightos Limited vs. Landstar System | Freightos Limited vs. JB Hunt Transport | Freightos Limited vs. Expeditors International of |
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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