Correlation Between Actoz Soft and UJU Electronics

Can any of the company-specific risk be diversified away by investing in both Actoz Soft and UJU Electronics 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 Actoz Soft and UJU Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Actoz Soft CoLtd and UJU Electronics Co, you can compare the effects of market volatilities on Actoz Soft and UJU Electronics 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 Actoz Soft with a short position of UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actoz Soft and UJU Electronics.

Diversification Opportunities for Actoz Soft and UJU Electronics

-0.03

Correlation Coefficient

Actoz Soft  UJU Electronics

Good diversification

The 3 months correlation between Actoz and UJU is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Actoz Soft CoLtd and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics and Actoz Soft 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 Actoz Soft CoLtd are associated (or correlated) with UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Actoz Soft i.e., Actoz Soft and UJU Electronics go up and down completely randomly.

Pair Corralation between Actoz Soft and UJU Electronics

Assuming the 90 days trading horizon Actoz Soft CoLtd is expected to generate 1.08 times more return on investment than UJU Electronics. However, Actoz Soft is 1.08 times more volatile than UJU Electronics Co. It trades about 0.03 of its potential returns per unit of risk. UJU Electronics Co is currently generating about 0.02 per unit of risk. If you would invest  652,000  in Actoz Soft CoLtd on September 27, 2024 and sell it today you would earn a total of  14,000  from holding Actoz Soft CoLtd or generate 2.15% return on investment over 90 days.

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

Actoz Soft CoLtd  vs.  UJU Electronics Co

Actoz Soft CoLtd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Actoz Soft CoLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Actoz Soft is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

UJU Electronics

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UJU Electronics Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UJU Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Actoz Soft and UJU Electronics

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

The idea behind Actoz Soft CoLtd and UJU Electronics Co 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.