Correlation Between United Parcel and CSX
Can any of the company-specific risk be diversified away by investing in both United Parcel and CSX 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 CSX 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 CSX Corporation, you can compare the effects of market volatilities on United Parcel and CSX 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 CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and CSX.
Diversification Opportunities for United Parcel and CSX
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and CSX is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation 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 CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of United Parcel i.e., United Parcel and CSX go up and down completely randomly.
Pair Corralation between United Parcel and CSX
Considering the 90-day investment horizon United Parcel Service is expected to under-perform the CSX. In addition to that, United Parcel is 1.99 times more volatile than CSX Corporation. It trades about -0.11 of its total potential returns per unit of risk. CSX Corporation is currently generating about -0.17 per unit of volatility. If you would invest 3,600 in CSX Corporation on November 3, 2024 and sell it today you would lose (313.00) from holding CSX Corporation or give up 8.69% 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. CSX Corp.
Performance |
| Timeline |
| United Parcel Service |
| CSX Corporation |
United Parcel and CSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and CSX
The main advantage of trading using opposite United Parcel and CSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, CSX 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 CSX will offset losses from the drop in CSX'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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