Correlation Between Grow Solutions and Ultrack Systems

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

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

Diversification Opportunities for Grow Solutions and Ultrack Systems

0.0

Correlation Coefficient

Grow Solutions  Ultrack Systems

Pay attention - limited upside

The 3 months correlation between Grow and Ultrack is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grow Solutions Holdings and Ultrack Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrack Systems and Grow Solutions 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 Grow Solutions Holdings are associated (or correlated) with Ultrack Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrack Systems has no effect on the direction of Grow Solutions i.e., Grow Solutions and Ultrack Systems go up and down completely randomly.

Pair Corralation between Grow Solutions and Ultrack Systems

If you would invest  0.02  in Ultrack Systems on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Ultrack Systems or generate 0.0% return on investment over 90 days.

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

Grow Solutions Holdings  vs.  Ultrack Systems

Grow Solutions Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grow Solutions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grow Solutions is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ultrack Systems

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultrack Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating essential indicators, Ultrack Systems sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grow Solutions and Ultrack Systems

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

The idea behind Grow Solutions Holdings and Ultrack Systems 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.