Correlation Between Raontech and Ubiquoss

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

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

Diversification Opportunities for Raontech and Ubiquoss

0.19

Correlation Coefficient

Raontech  Ubiquoss

Average diversification

The 3 months correlation between Raontech and Ubiquoss is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Raontech and Ubiquoss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquoss and Raontech 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 Raontech are associated (or correlated) with Ubiquoss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquoss has no effect on the direction of Raontech i.e., Raontech and Ubiquoss go up and down completely randomly.

Pair Corralation between Raontech and Ubiquoss

Assuming the 90 days trading horizon Raontech is expected to under-perform the Ubiquoss. In addition to that, Raontech is 2.04 times more volatile than Ubiquoss. It trades about -0.06 of its total potential returns per unit of risk. Ubiquoss is currently generating about 0.02 per unit of volatility. If you would invest  808,881  in Ubiquoss on September 30, 2024 and sell it today you would earn a total of  12,119  from holding Ubiquoss or generate 1.5% return on investment over 90 days.

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

Raontech  vs.  Ubiquoss

Raontech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raontech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ubiquoss

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Raontech and Ubiquoss

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

The idea behind Raontech and Ubiquoss 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.