Correlation Between Fortress Transp and U BX

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

By analyzing existing cross correlation between Fortress Transp Infra and U BX Technology Ltd, you can compare the effects of market volatilities on Fortress Transp and U BX 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 Fortress Transp with a short position of U BX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and U BX.

Diversification Opportunities for Fortress Transp and U BX

0.04

Correlation Coefficient

Fortress Transp  U BX

Significant diversification

The 3 months correlation between Fortress and UBXG is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and U BX Technology Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U BX Technology and Fortress Transp 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 Fortress Transp Infra are associated (or correlated) with U BX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U BX Technology has no effect on the direction of Fortress Transp i.e., Fortress Transp and U BX go up and down completely randomly.

Pair Corralation between Fortress Transp and U BX

Given the investment horizon of 90 days Fortress Transp is expected to generate 158.93 times less return on investment than U BX. But when comparing it to its historical volatility, Fortress Transp Infra is 41.69 times less risky than U BX. It trades about 0.03 of its potential returns per unit of risk. U BX Technology Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  68.00  in U BX Technology Ltd on September 22, 2024 and sell it today you would earn a total of  253.00  from holding U BX Technology Ltd or generate 372.06% return on investment over 90 days.

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

Fortress Transp Infra  vs.  U BX Technology Ltd

Fortress Transp Infra

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transp Infra are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Fortress Transp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

U BX Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U BX Technology Ltd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, U BX reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fortress Transp and U BX

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

The idea behind Fortress Transp Infra and U BX Technology Ltd 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.