Correlation Between Rogers Communications and UPS CDR

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

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

Diversification Opportunities for Rogers Communications and UPS CDR

0.62

Correlation Coefficient

Rogers Communications  UPS CDR

Poor diversification

The 3 months correlation between Rogers and UPS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and UPS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPS CDR and Rogers Communications 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 Rogers Communications 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 Rogers Communications i.e., Rogers Communications and UPS CDR go up and down completely randomly.

Pair Corralation between Rogers Communications and UPS CDR

Assuming the 90 days trading horizon Rogers Communications is expected to generate 1.08 times more return on investment than UPS CDR. However, Rogers Communications is 1.08 times more volatile than UPS CDR. It trades about -0.1 of its potential returns per unit of risk. UPS CDR is currently generating about -0.2 per unit of risk. If you would invest  4,400  in Rogers Communications on December 29, 2024 and sell it today you would lose (169.00) from holding Rogers Communications or give up 3.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Rogers Communications  vs.  UPS CDR

Rogers Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal 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.

UPS CDR

Risk-Adjusted Performance

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 latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Rogers Communications and UPS CDR

The main advantage of trading using opposite Rogers Communications and UPS CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications 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 Rogers Communications 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.