Correlation Between United Parcel and Atacado SA
Can any of the company-specific risk be diversified away by investing in both United Parcel and Atacado SA 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 Atacado SA 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 Atacado SA, you can compare the effects of market volatilities on United Parcel and Atacado SA 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Atacado SA.
Diversification Opportunities for United Parcel and Atacado SA
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Atacado is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of United Parcel i.e., United Parcel and Atacado SA go up and down completely randomly.
Pair Corralation between United Parcel and Atacado SA
Assuming the 90 days trading horizon United Parcel Service is expected to generate 0.51 times more return on investment than Atacado SA. However, United Parcel Service is 1.96 times less risky than Atacado SA. It trades about 0.14 of its potential returns per unit of risk. Atacado SA is currently generating about -0.15 per unit of risk. If you would invest 4,481 in United Parcel Service on September 2, 2024 and sell it today you would earn a total of 629.00 from holding United Parcel Service or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. Atacado SA
Performance |
| Timeline |
| United Parcel Service |
| Atacado SA |
United Parcel and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Atacado SA
The main advantage of trading using opposite United Parcel and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| United Parcel vs. Paycom Software | United Parcel vs. Take Two Interactive Software | United Parcel vs. Cognizant Technology Solutions | United Parcel vs. Bemobi Mobile Tech |
| Atacado SA vs. Companhia Siderrgica Nacional | Atacado SA vs. Cyrela Brazil Realty | Atacado SA vs. Fras le SA | Atacado SA vs. Energisa SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |