Correlation Between Olympia Financial and UPS CDR

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

By analyzing existing cross correlation between Olympia Financial Group and UPS CDR, you can compare the effects of market volatilities on Olympia Financial and UPS CDR 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 Olympia Financial with a short position of UPS CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and UPS CDR.

Diversification Opportunities for Olympia Financial and UPS CDR

-0.66

Correlation Coefficient

Olympia Financial  UPS CDR

Excellent diversification

The 3 months correlation between Olympia and UPS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and UPS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPS CDR and Olympia Financial 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 Olympia Financial Group are associated (or correlated) with UPS CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPS CDR has no effect on the direction of Olympia Financial i.e., Olympia Financial and UPS CDR go up and down completely randomly.

Pair Corralation between Olympia Financial and UPS CDR

Assuming the 90 days trading horizon Olympia Financial Group is expected to generate 1.05 times more return on investment than UPS CDR. However, Olympia Financial is 1.05 times more volatile than UPS CDR. It trades about 0.02 of its potential returns per unit of risk. UPS CDR is currently generating about -0.02 per unit of risk. If you would invest  10,351  in Olympia Financial Group on October 25, 2024 and sell it today you would earn a total of  549.00  from holding Olympia Financial Group or generate 5.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Olympia Financial Group  vs.  UPS CDR

Olympia Financial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Olympia Financial Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Olympia Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

UPS CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UPS CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, UPS CDR is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Olympia Financial and UPS CDR

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

The idea behind Olympia Financial Group and UPS CDR 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.