Correlation Between PS International and United Parcel

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

By analyzing existing cross correlation between PS International Group and United Parcel Service, you can compare the effects of market volatilities on PS International 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 PS International with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PS International and United Parcel.

Diversification Opportunities for PS International and United Parcel

-0.02

Correlation Coefficient

PS International  United Parcel

Good diversification

The 3 months correlation between PSIG and United is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PS International Group 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 PS International 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 PS International Group 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 PS International i.e., PS International and United Parcel go up and down completely randomly.

Pair Corralation between PS International and United Parcel

Given the investment horizon of 90 days PS International Group is expected to generate 3.68 times more return on investment than United Parcel. However, PS International is 3.68 times more volatile than United Parcel Service. It trades about 0.02 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.07 per unit of risk. If you would invest  51.00  in PS International Group on December 28, 2024 and sell it today you would lose (5.00) from holding PS International Group or give up 9.8% of portfolio value over 90 days.

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

PS International Group  vs.  United Parcel Service

PS International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PS International Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, PS International reported solid returns over the last few months and may actually be approaching a breakup point.

United Parcel Service

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Parcel Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PS International and United Parcel

The main advantage of trading using opposite PS International and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PS International 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.

The idea behind PS International Group and United Parcel Service 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.