Correlation Between UNITED and Dow Jones
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By analyzing existing cross correlation between UNITED PARCEL SVC and Dow Jones Industrial, you can compare the effects of market volatilities on UNITED and Dow Jones 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 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED and Dow Jones.
Diversification Opportunities for UNITED and Dow Jones
Good diversification
The 3 months correlation between UNITED and Dow is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding UNITED PARCEL SVC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and UNITED 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 SVC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of UNITED i.e., UNITED and Dow Jones go up and down completely randomly.
Pair Corralation between UNITED and Dow Jones
Assuming the 90 days trading horizon UNITED PARCEL SVC is expected to generate 1.41 times more return on investment than Dow Jones. However, UNITED is 1.41 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 10,708 in UNITED PARCEL SVC on October 24, 2024 and sell it today you would earn a total of 379.00 from holding UNITED PARCEL SVC or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
UNITED PARCEL SVC vs. Dow Jones Industrial
Performance |
| Timeline |
UNITED and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UNITED PARCEL SVC
Pair trading matchups for UNITED
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UNITED and Dow Jones
The main advantage of trading using opposite UNITED and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| UNITED vs. Udemy Inc | UNITED vs. Gannett Co | UNITED vs. Lithium Americas Corp | UNITED vs. Lincoln Educational Services |
| Dow Jones vs. Transocean | Dow Jones vs. Noble plc | Dow Jones vs. Evolution Gaming Group | Dow Jones vs. Addus HomeCare |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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