Correlation Between United Parcel and Energisa
Can any of the company-specific risk be diversified away by investing in both United Parcel and Energisa 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 Energisa 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 Energisa SA, you can compare the effects of market volatilities on United Parcel and Energisa 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 Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Energisa.
Diversification Opportunities for United Parcel and Energisa
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Energisa is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa 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 Energisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa SA has no effect on the direction of United Parcel i.e., United Parcel and Energisa go up and down completely randomly.
Pair Corralation between United Parcel and Energisa
Assuming the 90 days trading horizon United Parcel Service is expected to generate 1.34 times more return on investment than Energisa. However, United Parcel is 1.34 times more volatile than Energisa SA. It trades about 0.06 of its potential returns per unit of risk. Energisa SA is currently generating about -0.07 per unit of risk. If you would invest 4,481 in United Parcel Service on September 3, 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. Energisa SA
Performance |
| Timeline |
| United Parcel Service |
| Energisa SA |
United Parcel and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Energisa
The main advantage of trading using opposite United Parcel and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Energisa 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 Energisa will offset losses from the drop in Energisa's long position.| United Parcel vs. FedEx | United Parcel vs. Sequoia Logstica e | United Parcel vs. Energisa SA | United Parcel vs. BTG Pactual Logstica |
| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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