Correlation Between Allegiant Gold and UPS CDR

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

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

Diversification Opportunities for Allegiant Gold and UPS CDR

0.77

Correlation Coefficient

Allegiant Gold  UPS CDR

Poor diversification

The 3 months correlation between Allegiant and UPS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Gold and UPS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPS CDR and Allegiant Gold 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 Allegiant Gold 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 Allegiant Gold i.e., Allegiant Gold and UPS CDR go up and down completely randomly.

Pair Corralation between Allegiant Gold and UPS CDR

Assuming the 90 days trading horizon Allegiant Gold is expected to generate 11.16 times more return on investment than UPS CDR. However, Allegiant Gold is 11.16 times more volatile than UPS CDR. It trades about 0.19 of its potential returns per unit of risk. UPS CDR is currently generating about 0.07 per unit of risk. If you would invest  14.00  in Allegiant Gold on April 25, 2025 and sell it today you would earn a total of  46.00  from holding Allegiant Gold or generate 328.57% return on investment over 90 days.

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

Allegiant Gold  vs.  UPS CDR

Allegiant Gold

Risk-Adjusted Performance

Good

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

UPS CDR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UPS CDR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, UPS CDR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Allegiant Gold and UPS CDR

The main advantage of trading using opposite Allegiant Gold and UPS CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Gold 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 Allegiant Gold 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.