Correlation Between United Parcel and Intel
Can any of the company-specific risk be diversified away by investing in both United Parcel and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on United Parcel and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Intel.
Diversification Opportunities for United Parcel and Intel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Intel is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of United Parcel i.e., United Parcel and Intel go up and down completely randomly.
Pair Corralation between United Parcel and Intel
Considering the 90-day investment horizon United Parcel Service is expected to generate 0.89 times more return on investment than Intel. However, United Parcel Service is 1.13 times less risky than Intel. It trades about -0.09 of its potential returns per unit of risk. Intel is currently generating about -0.35 per unit of risk. If you would invest 15,657 in United Parcel Service on January 25, 2024 and sell it today you would lose (770.00) from holding United Parcel Service or give up 4.92% 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. Intel
Performance |
| Timeline |
| United Parcel Service |
| Intel |
United Parcel and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Intel
The main advantage of trading using opposite United Parcel and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| United Parcel vs. JB Hunt Transport | United Parcel vs. Aquagold International | United Parcel vs. Thrivent High Yield | United Parcel vs. Morningstar Unconstrained Allocation |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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