Correlation Between United Parcel and Werner Enterprise

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

Diversification Opportunities for United Parcel and Werner Enterprise

  Correlation Coefficient

Poor diversification

The 3 months correlation between United and Werner is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service and Werner Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werner Enterprise 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 Werner Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werner Enterprise has no effect on the direction of United Parcel i.e., United Parcel and Werner Enterprise go up and down completely randomly.

Pair Corralation between United Parcel and Werner Enterprise

Considering the 90-day investment horizon United Parcel Service is expected to under-perform the Werner Enterprise. In addition to that, United Parcel is 1.2 times more volatile than Werner Enterprise. It trades about -0.32 of its total potential returns per unit of risk. Werner Enterprise is currently generating about 0.01 per unit of volatility. If you would invest  3,888  in Werner Enterprise on July 8, 2022 and sell it today you would earn a total of  9.00  from holding Werner Enterprise or generate 0.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

United Parcel Service  vs.  Werner Enterprise

 Performance (%) 
United Parcel Service 
United Performance
0 of 100
Over the last 90 days United Parcel Service has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

United Price Channel

Werner Enterprise 
Werner Performance
0 of 100
Over the last 90 days Werner Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Werner Enterprise is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Werner Price Channel

United Parcel and Werner Enterprise Volatility Contrast

   Predicted Return Density   

Pair Trading with United Parcel and Werner Enterprise

The main advantage of trading using opposite United Parcel and Werner Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel position performs unexpectedly, Werner Enterprise 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 Werner Enterprise will offset losses from the drop in Werner Enterprise's long position.
United Parcel vs. Amazon Inc
The idea behind United Parcel Service and Werner Enterprise 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.
Werner Enterprise vs. Amazon Inc
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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