Correlation Between Fenix Outdoor and United Parcel
Can any of the company-specific risk be diversified away by investing in both Fenix Outdoor and United Parcel 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 Fenix Outdoor and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fenix Outdoor International and United Parcel Service, you can compare the effects of market volatilities on Fenix Outdoor and United Parcel 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 Fenix Outdoor with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenix Outdoor and United Parcel.
Diversification Opportunities for Fenix Outdoor and United Parcel
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fenix and United is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fenix Outdoor International and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service and Fenix Outdoor 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 Fenix Outdoor International are associated (or correlated) with United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Fenix Outdoor i.e., Fenix Outdoor and United Parcel go up and down completely randomly.
Pair Corralation between Fenix Outdoor and United Parcel
Assuming the 90 days trading horizon Fenix Outdoor International is expected to generate 0.67 times more return on investment than United Parcel. However, Fenix Outdoor International is 1.49 times less risky than United Parcel. It trades about 0.24 of its potential returns per unit of risk. United Parcel Service is currently generating about 0.02 per unit of risk. If you would invest 64,100 in Fenix Outdoor International on December 29, 2023 and sell it today you would earn a total of 4,900 from holding Fenix Outdoor International or generate 7.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fenix Outdoor International vs. United Parcel Service
Performance |
Timeline |
Fenix Outdoor Intern |
United Parcel Service |
Fenix Outdoor and United Parcel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fenix Outdoor and United Parcel
The main advantage of trading using opposite Fenix Outdoor and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenix Outdoor position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.Fenix Outdoor vs. Arion Banki Hf | Fenix Outdoor vs. SaveLend Group AB | Fenix Outdoor vs. Nordic Asia Investment | Fenix Outdoor vs. Nordea Bank Abp |
United Parcel vs. Jayud Global Logistics | United Parcel vs. Freightos Limited Warrants | United Parcel vs. JB Hunt Transport | United Parcel vs. Shengfeng Development Limited |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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