Correlation Between United Parcel and Rogers Communications

Can any of the company-specific risk be diversified away by investing in both United Parcel and Rogers Communications 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 Rogers Communications 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 Rogers Communications, you can compare the effects of market volatilities on United Parcel and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Rogers Communications.

Diversification Opportunities for United Parcel and Rogers Communications

0.0

Correlation Coefficient

United Parcel  Rogers Communications

Pay attention - limited upside

The 3 months correlation between United and Rogers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of United Parcel i.e., United Parcel and Rogers Communications go up and down completely randomly.

Pair Corralation between United Parcel and Rogers Communications

If you would invest (100.00) in United Parcel Service on October 6, 2024 and sell it today you would earn a total of  100.00  from holding United Parcel Service or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

United Parcel Service  vs.  Rogers Communications

United Parcel Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Parcel Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, United Parcel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Rogers Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with United Parcel and Rogers Communications

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

The idea behind United Parcel Service and Rogers Communications 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.