Correlation Between UGI and UGI Corp

Can any of the company-specific risk be diversified away by investing in both UGI and UGI Corp 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 UGI and UGI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UGI Corporation and UGI Corp Unit, you can compare the effects of market volatilities on UGI and UGI Corp 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 UGI with a short position of UGI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UGI and UGI Corp.

Diversification Opportunities for UGI and UGI Corp

-0.23

Correlation Coefficient

UGI  UGI Corp

Very good diversification

The 3 months correlation between UGI and UGI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding UGI Corp. and UGI Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corp Unit and UGI 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 UGI Corporation are associated (or correlated) with UGI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corp Unit has no effect on the direction of UGI i.e., UGI and UGI Corp go up and down completely randomly.

Pair Corralation between UGI and UGI Corp

If you would invest  6,581  in UGI Corp Unit on August 15, 2024 and sell it today you would earn a total of  0.00  from holding UGI Corp Unit or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

UGI Corp.  vs.  UGI Corp Unit

UGI Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UGI Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, UGI is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

UGI Corp Unit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UGI Corp Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, UGI Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with UGI and UGI Corp

The main advantage of trading using opposite UGI and UGI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGI position performs unexpectedly, UGI Corp 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 UGI Corp will offset losses from the drop in UGI Corp's long position.

The idea behind UGI Corporation and UGI Corp Unit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.